Islamabad April 16 2022: The decision announced last night to continue petrol and diesel subsidies was a tough one and will have to be revisited, says Miftah Ismail.
At the moment the government is losing Rs 21 per litre on petrol and Rs 52 per litre on diesel. That’s a loss of Rs 3600 crore in 2 weeks or a loss of Rs 250 crore per day.
This expense is more than the cost of running the entire civilian federal government plus the entire BISP/Ehsaas programme. We simply cannot afford to walk in the minefield PTI has left for the government.
PTI has tied our hands by actually committing in writing that not only will they recover full cost of fuels but also impose Rs 30 per litre levy and 17% sales tax on those fuels. According to PTI commitments the price of petrol should be Rs 236 and diesel should be Rs 264 pet liter.
Prime Minister Shehbaz Sharif is in no mood to impose such prices plus high taxes on the people. But at the same time we cannot let our fiscal and external financial position deteriorate further and have our development partners walk out. Tough choices need to be made.
Note also that the fuel price subsidy is coming from increasing govt expenses and raising debt. Unlike BISP where poor people are being helped, here the average (low income) Pakistani is subsidising middle- to high income Pakistani.
When a businessman buys 80 litres of petrol for his Land Cruiser the people of Pakistan are gifting me Rs 1680! When an industrialists buys 2000 litres for his generator, Pakistani people pay him Rs 104,000.
