Govt considers waiving FPA on 300 units

ISLAMABAD: Minister for Finance Miftah Ismail on Friday ruled out the possibility of seeking rescheduling of foreign debt from international creditors, saying that Pakistan had paid all its external debt obligations in the past and would continue so in the future as well.

Prime Minister Shehbaz Sharif constituted a high-powered committee for considering waiving Fuel Price Adjustment (FPA) for electricity consumers using 201 to 300 units. If the PM approves abolishing of FPA up to 300 units, the government will require the additional cost of Rs 13 billion, said the minister while addressing a news conference at the state TV headquarters.

“The prime minister waived off Fuel Price Adjustment up to 200 units on this month’s electricity bills after taking the World Bank (WB) and the IMF into confidence and there will be no need for customers to go the office of power companies for getting revised bills. The PM also constituted a committee to consider waiving off FPA up to 300 units which will require the additional cost of Rs 13 billion. We will manage additional financing without increasing budget deficit or compromising the surplus primary balance of Rs 153 billion for the current fiscal year” Minister for Finance Miftah Ismail said.

When asked about Abid Sher Ali’s statement criticizing Minister for Finance Miftah Ismail over increased electricity bills, the minister replied that he (Miftah Ismail) was an easy target but he should himself inquire whether any action was taken without taking PM Shehbaz Sharif into confidence. To another query about Ishaq Dar, he said that all allegations of corruption against him were unwarranted and possessed no ground.

However, the minister refused to share the government’s plan to manage additional financing costs required for waiving off FPA. But the official sources said that the FPA was expected to start receding in the coming months, especially during the winter and then the government will be able to collect it so it will be averaged out creating no additional demand for the provision of increased subsidy amount.

The finance minister said that the government abolished FPA for 56 per cent of electricity consumers and after providing incentives to tube-wells owners belonging to Balochistan the total number went up to 60 per cent. He said that the government would charge full FPA from rich domestic consumers, industrialists, commercial, hotels, and restaurants

. The minister said that the PM held meetings with ambassadors of different countries and asked them to help Pakistan in the wake of devasting floods. The World Bank would repurpose $370 million in funding which will be provided within the next few days. He said that the ADB, USA, EU, and others would also extend financial assistance to Pakistan. He said that PM Relief Fund was established and the government provided Rs 28 billion to BISP for the provision of providing stipends to the flood-affected populations. He said that the government also provided Rs 5 billion to National Disaster Management Authority (NDMA) for undertaking relief and rehabilitation efforts. He said that the flash floods resulted in the deaths of 0.7 million cattle causing Rs 40 to Rs 50 billion losses. Dewatering if not accomplished in interior parts of Sindh then the sowing of wheat might be damaged. He said that it might cause loss to the agriculture sector but the quantum of damage to the country’s growth target for the current fiscal year is not yet known. To another query, he said that the whole nation would join hands to meet the financial requirements of flood-hit areas. If the international donors would not come forward the government would manage from its resources.

Qatar, the minister said, would invest $3 billion including procuring two RLNG power plants, getting long-term lease and management control of two airports, generating 8000 MW solar-based plants, and constructing the terminal at the seaport. Besides, he said if all these projects could not be materialized then Qatar would invest in different public sector companies’ shares from the stock market.

He said that Pakistan fulfilled bridge financing of $4 billion for reviving the IMF programme and now the Fund’s Executive Board would grant its assent on the release of the next tranche on coming Monday. He said that Saudi Arabia also publicly announced investing $1 billion. The KSA had already conveyed to provide an additional $1 billion for the provision of oil on deferred payment. Earlier, Pakistan and KSA were under discussion for the possibility of transferring one billion Special Drawing Rights (SDRs), however, its mechanism had not yet been finalized. Saudi Arabia also agreed to roll over its deposit of $3 billion from December 2022 to June 2023 under the IMF arrangement.

To another question about the possibility of raising GST on POL products, he said that he was hopeful that such a need would not arise as the FBR would be able to meet its first quarter (July-September) revenue collection target. He also dispelled the impression about the fixation of an exchange rate with the IMF and said that the rupee would be appreciated in the coming days. He said that the rupee had depreciated recently because remittances and exports slowed down.