On the day Ishaq Dar was designated as Leader of the House in the Senate by Prime Minister Shehbaz Sharif, the new Finance Minister announced a substantial cut in the prices of the petroleum products.
Addressing a news conference on Friday, he announced a reduction in POL prices — petrol by Rs12.63 per litre and High-Speed Diesel by Rs 12.13 per litre — with effect from October 1, 2022.
Similar cuts have also been made in the prices of other petroleum products and the Government also did not increase taxes or levies on POL products.
However, the government rationalised the petroleum levy on petrol and diesel to provide relief to the masses.
Dar also announced an extension in the last date for filing of income tax returns due to the flood situation in the country.
The reduction in POL prices would surely have a salutary effect on the overall inflation, providing relief to the masses, who had pinned hopes on the new Finance Minister for the purpose.
The move conveys the right kind of message to the people that Dar, as before, has the capability and vision to resolve not only financial woes of the country but also sufferings of the people.
Ishaq Dar had vowed that he would focus on measures to curb inflation, stabilize exchange rate and bring down unaffordable prices of electricity.
The rupee is already gaining strength despite a fall in the foreign exchange reserves of the country and together with this the decision to lower prices of POL products would hopefully reverse the inflationary pressures including an upsurge in the tariff of electricity, which also has a linkage with the prices of oil.
There are reports that Dar announced the relief after a positive nod from the International Monetary Fund (IMF) which speaks volumes about economic and financial vulnerabilities of the country but the option of convincing the Fund for flexibility on some of the tough conditions was already there due to devastating floods that caused huge losses to the national economy but credit goes to Ishaq Dar for putting across the Government’s point of view in an effective and result-oriented manner.
The fact that the Federal Board of Revenue (FBR) was able not only to achieve the tax collection target for September 2022 but exceeded the target for the first quarter of the current financial year also helped convince the IMF that there would be no revenue loss.
We hope the FBR would continue its efforts without harassment of regular taxpayers and instead expand the tax net in a realistic manner.
The Finance Minister also needs to take firm decisions on exchange rate and penalize all banks and exchange companies that played havoc with the local currency for transitory gains.
