Finance Minister Miftah Ismail has agreed with the global lender’s suggestion of curtailing the fuel subsidy, which was announced by former premier Imran Khan, as Pakistan can not afford such an amount of assistance amid the prevailing economic situation.
“There is never a good time to start anything difficult. We have had actually good discussions with the [International Monetary] Fund. They have talked about removing the subsidy of fuel and I agree with them,” he said during a virtual conversation hosted by the Atlantic Council’s South Asia Center and GeoEconomics Center in Washington.
Miftah was accompanied by Pakistan’s Ambassador to the US Sardar Masood Khan.
After former PM Imran Khan’s February 28 decision, the existing price of high-speed diesel is Rs144.15 per litre, petrol (Rs149.86 per litre), and kerosene oil (Rs125.56 per litre), and LDO (Rs118.31 per litre).
The new coalition government on April 15 rejected the Oil and Gas Regulatory Authority summary of increasing the petrol price by Rs21.50 and diesel by Rs51.30. Addressing an iftar for parliamentary leaders, PM Shehbaz said that people would have started “cursing people” if the government had given a green signal to such a proposal.
According to business experts, the petrol price could shoot to Rs227 per litre after the ending of government subsidy, which amounts to Rs15-20, the addition of 17% general sales tax, which will add Rs27 to it, and inclusion of petroleum levy. However, the decision to set the petrol price after the ending of the subsidy lies with the government.
Moreover, Brent crude settled down $1.68, or 1.6%, at $106.65 a barrel, Reuters reported. US West Texas Intermediate crude declined $1.72, or 1.7%, to $102.07. Global benchmark Brent hit $139 a barrel last month, its highest price since 2008, but both oil benchmarks declined nearly 5% this week on demand concerns.