Govt paying Rs104bn to keep petrol prices at Rs150 per litre: Tarin

LAHORE: Federal Finance Minister Shaukat Tarin has said the government has to pay Rs104bn from the exchequer to keep petrol prices at Rs150 per liter. Otherwise, in view of current international prices, the domestic petrol price should be Rs240 per liter.

However, the super cycle of inflation is worrisome for the government as commodity prices have increased manifold that is affecting the urban lower middle, middle and salaried class. 

“If the super cycle of inflation prolongs, it will further affect the public,” Tarin said while addressing a seminar organised by the Aiwan-e-Karkunan-e-Pakistan and the Nazria-e-Pakistan Trust on the Revival of Pakistan Economy and Outlook in 2022. “We are expecting above 5 per cent growth rate this year but inflation will also be between 8 and 10 per cent. The government is not worried about the growth rate anymore as it has put the economy on the right path but the super cycle of inflation is a real problem,” he observed and said a bumper crop of wheat is around as the harvest has already started in Sindh. The services and production sectors are performing well. This will help achieve the growth targets. He said all bumper crops will contribute 2.5 per cent to growth. The roadmap given by the government will not be changed by anyone whether the PTI stays in power or not. “We have changed the growth strategy and the IMF says the current 5 per cent growth rate of Pakistan will sustain till 2026,” he said and added the super cycle of inflation also affected the world and now the world is talking about bringing down the commodity prices. The global supplies were affected with Covid-19 but when the recovery started from it, the Ukraine issue emerged that aggravated the petrol prices. The sea freight increased four times. These are the factors which are contributing to inflation.

He said Rs50 billion loans have so far been disbursed under the Kamyab Jawan Programme. The government has asked China to shift the industry to SEZs in Pakistan instead of other countries. This will create employment. Currently, the trade balance is in favour of China, Tarin said, adding that Pakistan also sought Chinese support and investment in agriculture research and development and IT sectors.

He termed the nationalisation policy and becoming part of the Afghan war wrong decisions of past governments. He said he has adopted an inclusive and sustainable growth strategy for which housing, agriculture, industry, youth and underprivileged sectors are focused. He said there are only three million registered taxpayers out of whom one million are filing their returns to get Withholding Tax refunds. Further, only 70 jewellers are registered with the FBR while the retail sector size is Rs20 trillion and only 3 to 4 trillion is documented. These all issues were focused that resulted in an increase in revenue collection. There are a lot of issues in the Customs Department where under-invoicing and over-invoicing worth billions of rupees is being made.

He said the housing mortgage is not available in Pakistan while only 33 per cent banking footprint exists in the country. The banks give 85 per cent of total lending to only nine cities of the country while getting deposits all over the country. The government target is to increase the banking footprint to 80-90 per cent, he said.