ISLAMABAD: Finance Minister Shaukat Tarin said on Wednesday that the power sector will be the focus of discussion with the International Monetary Fund (IMF) during the upcoming 6th review, as revenue collection performance has greatly increased. exceeded targets.

Addressing a press conference with SAPM to Prime Minister of Food Security Jamshid Cheema and Minister of State for Information Farrukh Habib, the Minister of Finance said the IMF had called for an increase in tariffs for the electricity to reduce the circular debt but were asked to “allow us to make our own way”.

We took three months out of the Fund and as time would run out before the next review, the discussion would focus on the electricity sector, he said, and claimed that some improvements had been made to the sector. of electricity and that the flow of circular debt has been drastically reduced.

The finance minister said Pakistan would discuss its own plan with the IMF and try to find a mechanism.

He said incomes and imports have increased, as has large-scale manufacturing (LSM) indicating economic activity, but his concern is that the economy is not expected to overheat.

The government has the power to meet the IMF’s tariff condition

Tarin further stated that the exchange rate fluctuated from Rs 152 to Rs 169 and that the main reason for the exchange rate fluctuation was rising oil prices, as well as increased imports as the economy was growing and the US dollar was also going into Afghanistan from Pakistan.

There is a demand for dollars in Afghanistan, so dollars from Pakistan are also sent there.

The finance minister said if the government had intervened on the exchange rate it would not have gone to Rs 169. He said it is close to the real effective exchange rate.

The government has decided to place a 100% cash margin and impose regulatory duties on certain items in order to control unnecessary imports of luxury and non-essential items, he said. The government would provide cash subsidies to 12.5 million families on wheat, sugar, pulses and other essentials to support them against the high cost in the country in the wake of Covid-19, the minister said finances. He added that the global supply chain and production have been severely affected due to the coronavirus and, as a result, the prices of essential commodities are at the highest level in the past 10 years.

However, he said, in Pakistan over the past two years inflation has fallen in both urban areas (from 15% to 10%) and rural areas (from 17.8% to 9.1%). %). “We are also giving tax relief on edible oil to lower prices by Rs 45-50 per kg.”

The government also started distributing wheat to the flour mills at Rs 1,950 for 40 kg and asked them to commit that the bag of flour weighing 20 kg will be sold at Rs 1,100 in the market, a- he declared.

The minister said the price of sugar has been set at Rs 90 per kg and the difference between the actual price and the subsidized price will be borne by the government.

Tarin said administratively the government was working on measures to reduce the middleman role, which was making a whopping 300 to 400 percent profit. This is not acceptable, said the Minister of Finance. He said sugar in the world market was $ 240 per tonne in 2018 and is now $ 430 per tonne.

The finance minister said the price of petroleum products has increased by 50 percent worldwide and the government has only transferred 13 to 14 percent and the rest has been absorbed through the tax on oil.

Base electricity tariff will be further increased, IMF says

The government has set a target of Rs 600 billion due to the oil tax in the current fiscal year budget and the shortfall would affect revenue. Therefore, he said the opposition’s criticism of petroleum products was unwarranted.

Tarin said another big step was being taken to provide cash subsidies to 40-42% of the population, in addition to reviving the price judiciary system to effectively control prices.

The Minister of Finance said that the income level of the population will increase with the growth of the GDP.

In addition, the Minister of Finance said that the Kamyab Pakistan program will be launched next month to support the poor.

However, Jamshid Cheema said that Pakistan was selling gasoline at the cheapest and made a regional comparison to explain that the price of gasoline in India was Rs 201 per liter, while in Pakistan it was sold. at Rs 124 and the price of diesel is Rs 180 in India while in Pakistan it is Rs123 per liter.

Apart from Egypt and the oil-exporting countries, gasoline is the cheapest in Pakistan, he added.

Copyright Business Recorder, 2021


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