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Wednesday June 29, 2022

Finance Minister Miftah Ismail hopeful of IMF deal next month

Miftah said that the staff level agreement with the IMF would be struck within June and then the Fund’s Board would be requested for approval of next tranche under the Extended Fund Facility

May 29, 2022
Federal Minister for Finance Miftah Ismail. Photo: The News/File
Federal Minister for Finance Miftah Ismail. Photo: The News/File

ISLAMABAD: Federal Minister for Finance Miftah Ismail said on Saturday that the government took the tough decision to hike the POL prices by Rs30 per litre at the cost of political capital and hoped that the staff level agreement with the IMF would be struck in June 2022.

“We have decided to provide monthly stipend of Rs2,000 to 14 million households who have monthly income of Rs40,000. They can call at telephone number 786 and share their Computerized National Identity Card (CNIC) numbers and within a few days, they will be informed whether they are eligible to get Rs2,000 or not under the Petrol and Diesel Sasta PM Programme,” Federal Minister for Finance Miftah Ismail said along with Minister of State for Finance Aisha Ghous Pasha here at a news conference on Saturday.

Miftah said that the staff level agreement with the IMF would be struck within June and then the Fund’s Board would be requested for approval of next tranche under the Extended Fund Facility. 

He said that Pakistan made a request to the IMF for extending the program period and jacking up the size of the program by $2 billion, increasing it from $6 to $8 billion. Pakistan, he said, has so far obtained $3 billion out of the $6 billion EFF program and with the possibility of an increased size, the available funding would be increased up to $4 or $5 billion under the existing arrangement. With the revival of IMF program, Pakistan would get more loans from the World Bank, AIIB and Asian Development Bank.

To another query with regard to the Kingdom of Saudi Arabia's package, he replied that the Saudi minister had recently confirmed that the KSA would rollover $3 billion, which would become due in December 2022. With regard to an additional package, he said that he would not talk about it right now and would discuss it in July this year.

The minister said that his hands were tied because of the written agreement signed by the PTI government with the IMF and under their agreed formula the petrol price should go up to Rs257 per liter and diesel Rs300 per liter. Now, he said that the government would not charge tax and petroleum levy on POL products.

To another query about the possibility of increasing the POL prices from June 1, 2022, he said that he did not know it exactly but it would be inappropriate to increase the prices so swiftly. However, the OGRA will send its summary and then the decision will be taken by the PM.

He said the government did not hike the petroleum prices with a happy heart. It took the tough decision in the larger interest for saving the state knowingly they would have to pay the cost of their political capital. If such subsidies would have continued, the country would have become bankrupt.

The minister said that there were 7.3 million beneficiaries of the BISP program and they would be able to give an additional Rs2,000 on monthly basis to compensate them from the hike in POL prices. Now all those who are earning less than Rs40,000 could send their CNIC details at phone number 786 and the government would assess their financial position with the help of Ehsaas or BISP data to ascertain whether they are eligible for getting monthly stipend or not. He said that women being head of the family would be provided this additional help.

The government, he said, assessed that there were 14 million households who earned monthly average income of Rs31,373 and the government would provide them 5 percent transport cost in the shape of monthly stipend. The Consumer Price Index (CPI) calculated by the Pakistan Bureau of Statistics (PBS) also estimated that the households spent 5 percent monthly income on their transportation cost.

He said that the government allocated Rs28 billion for one month for providing stipend of Rs2,000 till June 30, 2022 and the government would allocate funding for this program in the next budget for 2022-23. He also said that the funding for the BISP would also be increased in the next budget. This program will continue till the prices of POL products reduce in the international market, he added.

The minister added that Khappeas would not be allowed to bring banned items in bulk. There was a possibility that individuals could bring chocolates and other items in their luggage.

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