No hike in POL prices on immediate basis: Miftah

ISLAMABAD: Just ahead of holding talks with the IMF on the revival of stalled $6 billion program, Federal Minister for Finance Miftah Ismail on Sunday said that Prime Minister Shehbaz Sharif had refused to hike the prices of POL products on an immediate basis.

However, the minister hoped that they would be able to find out 'amicable solutions' during the upcoming parleys with the IMF for reviving the Fund program.

"The premier does not want to burden the masses, so he refused to hike the prices of POL products on an immediate basis. There is no need to rush to petrol pumps because the prices are not going to go up. However, the prices will be adjusted accordingly an immediate basis. There is no need to rush to petrol pumps because the prices are not going to go up. However, the prices will be adjusted accordingly afterwards but not on an immediate basis," Federal Minister for Finance Miftah Ismail said while addressing a news conference here on Sunday.

Pakistan and the IMF are scheduled to hold talks from May 18, 2022, in Doha with expectations that Islamabad would reverse its unfunded fuel subsidies ahead of kick-starting the talks. However, the government did not move ahead with revising upward the prices for the next fortnight with effect from May 16 (Sunday) mainly because the Shehbaz Sharif government did not want to pay the political cost on its shoulders, alone. They want that it should be shared by all the coalition partners. It is yet to seen how the IMF responds to showing a lacklustre approach by the incumbent coalition government.

The minister said that the PTI announced unfunded fuel subsidies and its cost escalated to over Rs120 billion for ongoing months, which was higher than the running of civil government. When they held a meeting with the IMF on the sidelines of the annual meeting, he said they asked the IMF program to extend the time-frame of the program and also jack up funding by $2 billion for increasing the size of the program to $8 billion.

The IMF high-ups are now holding a meeting this week in Doha. “We will find out an amicable solution in upcoming parleys on all issues, including fuel subsidies,” he added. Where the funding was kept for the provision of fuel subsidy, he could not find out, he added.

Answering a query about the Saudi Package, he said that Pakistan requested three things. First, rollover of $3 billion deposits, which was not due in fear future and it would become due in December 2022, which they agreed. Secondly, Pakistan asked them to double the oil facilities. They assured us to double it either through OPEC Fund, or EXIM Bank of IsDB. Thirdly, Pakistan sought additional deposits, which they agreed in principle. "I cannot share its exact details right now because it's under consideration,” he added.

With regard to the delegation's UAE visit, he said that discussions were held and the premier constituted a committee under his supervision to finalise the modalities. Such discussions require seven to eight days to finalize different proposals.

The minister alleged that wheat and fertilisers were smuggled out and they knew how much amount was given for selling the post of Excise Department at Attock Bridge. Now the government was going to import 5 million tons of wheat out of which 2 million tons would be used for the purpose of strategic reserves.

This scribe contacted Yousuf Nazar, an economist and former head of Citigroup Emerging Markets Investments, on Sunday. Nazar warned that there was no option but to increase the petrol prices and for the wealthy to make sacrifices to save Pakistan from bankruptcy because the IMF, China, and Saudi Arabia were not willing to provide aid unless the country takes tough measures within the framework of a proper macro stabilization program. This will have to be done regardless of who is in power, he added.

He said that the time was running out but the way forward was sacrifice by the rich and powerful elites as well because they had been the beneficiaries of massive subsidies and exemptions, allotment of lands at below-market prices, and other such concessions, which have been among the major reasons why Pakistan has gone to the IMF for 23 times, a world record.

Yousuf Nazar had warned in October 2021 that “skyrocketing energy prices will lead to the next big crisis in Pakistan.” He tweeted again on 13 March 2022, "An economic tsunami will hit Pakistan in the coming months and no government will be able to face it as neither the establishment or the political parties have the capacity or plan to manage it."