Tuesday February 20, 2024

All commodities becoming cheaper except tea: ‘Gas reservoirs depleting, no more cheaper supplies’

December 15, 2021

ISLAMABAD: Federal Minister for Information and Broadcasting Chaudhry Fawad Hussain Tuesday warned that the country was facing depletion of its gas reservoirs at the rate of 9 per cent every year, and it would run out of the commodity in the next few years.

He was giving a briefing to the media and replying to their questions about the federal cabinet meeting, presided over by Prime Minister Imran Khan here.

The minister said burden of 28pc of people living in big cities was being borne by 72pc of people. “People living in big cities, who are using subsidised gas, will have to change their habits and cheap supplies will have to be halted. The entire gas system will have to be restructured,” he added. The minister said that no big gas reservoir was discovered in the country after 1950.

Fawad noted that in a major development, 10 companies in private sector were given licences to import LPG [liquefied petroleum gas] and supply to consumers. The Oil and Gas Regulatory Authority (Ogra) annual report for the year 2019-20 was presented before the cabinet. The report comprises recommendations regarding the performance of Pakistan's petroleum industry, production, supply and demand and improvement of the petroleum industry.

The cabinet was informed that at present there is a 27-day stock of petrol and diesel, and 75 exploration licences generated revenue of Rs29 billion. Safety standards for LPG cylinders were being improved and a public awareness campaign was under way; an audit was being carried out to prevent gas theft, and action was being taken against those selling petrol at illegal pumps and in plastic containers.

The minister the prices of petroleum products in the world market had not come down enough that those could have an impact in Pakistan. The minister called for prayers so that oil prices come further down in the world market.

Asked for comment on allegations levelled in a TV show by former member of ruling PTI, Justice (retd) Wajihuddin Ahmad, and who once audited the party’s intra-party polls and called them null and void, Fawad remarked, “Don’t give importance to such clowns, who roam about and look for some importance while their own family members don’t recognise them at home”.

Justice Wajihuddin alleged that payment of Rs5 million per month for Imran Khan’s house expenses were paid by Jahangir Tareen-like persons. He belied a claim that Imran was an honest person.

Special Assistant to Prime Minister (SAPM) Dr Faisal Sultan gave briefing on the preventive measures regarding the new type of corona variant, Omicron, as the cabinet emphasised the need to increase vaccinations, maintaining social distancing and wearing masks.

The cabinet was informed that at present 20 million people in Pakistan have not been vaccinated with the second dose of corona vaccine. The forum appealed to all such citizens to take the second dose as soon as possible to prevent the spread of COVID. The meeting was also informed that immunity increases 17-folds after the second dose of the vaccine.

The cabinet welcomed the Election Commission of Pakistan (ECP) decision to use electronic voting machines (EVMs) in the local governments (LGs) elections in Islamabad. The cabinet was given a detailed briefing on the schedule regarding delivery and use of EVMs at all polling stations in the country and training of the staff.

The cabinet expressed its firm resolve to hold the next elections through EVMs after implementation of laws regarding the electronic voting machines and voting rights for overseas Pakistanis.

Fawad recalled that the issue of electronic machines was first raised by Asif Ali Zardari in 2012, then it was discussed in 2016 and Nawaz Sharif's government in 2017, who directed the Election Commission to prepare a comprehensive report on it.

He said the ECP should issue a tender on its own terms so that the companies all over the world where EVMs are manufactured should contact them. The minister said: “We are pushing the position of the PPP and the PMLN government and the Election Commission itself has asked for machines for the next elections”.

On the issue of Gwadar and recent protest by locals for their rights, the minister said that two federal ministers -- Asad Umar and Zubaida Jalal -- would visit Gwadar, discuss the situation, hold talks with protesters and present their report to Prime Minister Imran Khan.

He said that many times more funds than Islamabad had been spent on drinking water in Gwadar, but the issue was not yet resolved. He said Rs700 billion southern Balochistan project had been announced in which Rs560 billion would be given purely by the federation, even if the problem was not solved. “If this is happening, an investigation is needed into the issues. The two ministers will go there and review it and present a comprehensive report to the prime minister,” he added.

The minister said the third important agenda under consideration in the meeting was inflation, for the third week in a row the Sensitive Price Index (SPI) was going down and a general trend of declining prices was being observed.

He said that from January, the government would bear the health related expenses in all provinces except for Sindh. He said Sindh was mainly facing the price-hike issue. He said that according to the index, prices of tomatoes, chicken and potatoes declined while those of sugar and flour remained stable.

Despite being an agricultural country, he noted Pakistan imports pulses from New Zealand and Australia due to which people face inflation. But still Pakistan is better than other countries in Asia and India, Sri Lanka; cheaper than all Asian countries including Bangladesh. “It's just that tea and banaspati ghee are expensive here, and everything else is cheap,” he said.

Fawad said that only Karachi and Hyderabad were facing problem of inflation. At present, 20-kg flour bag was being sold for Rs1,300 in Karachi. Similarly the price of sugar in Karachi was higher than other cities. He said the government could not control the prices of flour and sugar in Sindh province; therefore, it requestd the provincial government to improve its control.

He said that despite gas crisis, the government had been able to resolve the issue of fertilizers in the best possible way. Sui Northern Gas Company would supply gas to urea plants by January 2022. Gas supply to Pak Arab and Fatima Fertilizer plants would be ensured. The process of importing additional 50,000 tons of urea should be completed expeditiously.

The minister noted there was an additional income of Rs400 billion for farmers owing to five bumper crops last year. At present, the price of urea is more than Rs10,000 abroad while in Pakistan, a bag is available at the official rate of Rs1,700.

The minister said that the report of the Sugar Sector Reforms Committee would be released on Wednesday. The report will be debated in public for three weeks and the sector, and there was one major proposal to deregulate it to provinces and the government should only ensure crushing season-related things.

Referring to the abolition of exemptions for the pharmaceutical sector among other sectors in the mini-budget, he said, “The pharmaceutical industry is on its feet for the first time in Pakistan. If you do not increase prices, the industry will sit down and now health cards have been issued anyway. And an increase of a medicine from Rs3 to Rs7 should not be an issue”.

The advisor on finance presented a comparative review of the prices of essential commodities to the federal cabinet and noted the weekly inflation rate has come down by 0.07pcf: prices of sugar, flour and household items have decreased; collectively, prices of nine items decreased while prices of 23 items remained stable. The cabinet expressed concerns over higher prices of essential commodities in Sindh including flour, sugar, milk, ghee and pulses.

The cabinet approved extension of period for exchange of old Pakistani 10, 50, 100 and 1000 currency notes till 31st Dec 2022 while the State Bank of Pakistan had sought extension for six years.

Fawad Chaudhry said the statements of Shahid Khaqan Abbasi and Muhammad Zubair have further manifested the division within the PMLN. In tweets, the minister said these families brought destruction to the country and now they are watching Karma. “The new leadership will now emerge in the N-League, which is a good thing. The PPP should also go beyond Zardari,” he tweeted. The minister said, “elections of powerful local governments in Khyber Pakhtunkhwa this month and in Punjab in the next few months show the confidence of the government. PPP and N-League could not field candidates in KP. The same situation will happen in Punjab”. The minister claimed that only one or two TV channels are trying to keep their practically dead politics alive.