ISLAMABAD: The previous government’s decision to reduce the petroleum prices by Rs10 per litre and cap them till end-June 2022 had no documentary evidence. There was no approval from the ECC or the cabinet, and it was a verbal decision.
This was stated by Minister of State for Petroleum Dr Musadik Malik while addressing a press conference here on Friday. He said no funds were allocated to subsidize the POL products. The Finance Division also had no record of allocated funds for this subsidy.
Regarding Imran Khan’s claim that Russia was willing to provide oil to Pakistan at 30 per cent less price, he said there was no such document of intent or a non-binding memorandum of understanding (MoU) to prove that they had made some breakthrough in this regard.
The former petroleum minister had written to his Russian counterpart that "we want to do trade in all sectors including the energy sector" and sought a lower oil price, but he did not receive a reply, Malik said and added: “We have also checked it through our ambassador, but no such agreement or positive response from Russia can prove that the PTI government was going to buy petroleum products at lower prices.”
He said the monthly cost of this subsidy was near Rs120 billion. This made Rs360 billion direct subsidy for three months, and if taxes were added, it reached Rs700 to Rs800. They dealt with the country as a theater. Imran Khan made wrong decisions, which brought the country to the brink of bankruptcy. "We have increased the POL prices with a heavy heart; we know it affects the poor the most. However, we have devised a strategy to insulate the poor from its adverse effects." He did not disclose the strategy and said Prime Minister Shehbaz Sharif would announce it as his prerogative.
Rejecting Imran Khan's statement about lower petroleum prices in India, he said petroleum prices in the neighbouring country were much higher than in Pakistan. He said the price of petrol in India was Rs250.17 per litre and that of diesel Rs234.03 if compared to the Pakistani rupee. “With the IMF, we have agreed to use a method to save the poor from the impacts of higher POL prices. A discussion is being made with the Fund to agree on soft agreements. We will soon bring the IMF programme on track and complete this process.”
To a question, he said the government wanted Pakistan to be an open market where everybody could do business in a competitive environment and “we want the same in the LNG sector”. Some international companies wanted to set up LNG terminals in Pakistan, he said and added: “Our circular debt increases by Rs100 billion every year, including capacity charges, T&D losses and less recovery. The recovery from the power sector is around 90 to 92 per cent; the remaining 8 per cent deficit is not recovered from consumers that adds by Rs200 to 300 billion each year.”
