Says impossible conditions, PTI govt agreed with IMF no t to be fulfilled
Finance Minister Miftah Ismail on Sunday said the government was not increasing petrol prices “for now”, going back on an important pre-condition set by the International Monetary Fund for the resumption of its loan programme.
Ismail said he would talk to the IMF and find a solution, adding that Prime Minister Shehbaz Sharif “is not in favour of putting this burden [increased oil prices] on people.
“I had recommended him to increase [petrol] prices but he said people can’t bear it,” the finance minister said. He, however, emphasised that petrol prices could be “adjusted anytime in the future” keeping in view international prices.
“I am not saying we will never increase the prices … the point is, we are not increasing them today, but we can adjust them at any time in the future,” he told a press conference in Islamabad.
Right after his media briefing, the minister reiterated his message in a statement on Twitter, saying that the government would not raise petrol prices. “But due to changing circumstances and international oil prices, we may have to revisit our decision soon.”
Despite not meeting an important ‘prior action’ conveyed to him by the IMF, the finance minister said the government would approach the Fund, hold talks and “conclude them positively”.
Criticising the PTI government, Ismail said it had “promised” the IMF in December that the primary deficit would be Rs25bn and the total deficit would be around Rs4,000bn. “The primary deficit has increased from Rs25bn to Rs1,320bn,” he said, questioning how the new government could cut it down in a few months.
He alleged that the IMF had ended its programme with the PTI government and the latter had been requesting the Fund to not make it public.
“I went to the IMF as soon as I came and asked them to start talks with us. They said give us a political commitment and I said we are ready to extend the programme by a year. They said okay let’s talk then.” The finance minister said he had requested the IMF that since the programme would be extended, a further $2bn should be added. The Fund said they would discuss it, Ismail added.
He said Pakistan’s delegation would go for the upcoming talks with the IMF mission and added that “we are bound to fulfil the promises that Imran Khan did [with the IMF] since they were the sovereign promises of Pakistan’s prime minister.”
“However, the impossible conditions they’ve agreed to with the IMF [will not be fulfilled],” he said, claiming that former finance minister Shaukat Tarin had committed to increasing petrol levy, along with tax.
“We won’t do this. I know there is a lot of inflation and there will be further inflation if petrol and diesel are made expensive. I’m going to the IMF and will talk to them again and we will find a solution.”
The finance minister said it was “important” to explain how the PTI government had brought the country to a stage where on one hand, commitments were made to the IMF, and on the other hand, petrol prices were kept low.
The finance minister criticised the PTI government’s economic performance on various other fronts, claiming it had failed to reduce expenditure, devalued the rupee, increased imports and failed to hike tax-to-GDP ratio among other things.
He said Pakistan’s imports were about to increase to $75bn and he would soon present suggestions to curtail them. Exports, meanwhile, would be $30bn which would be leading to a trade deficit of $45bn and remittances were expected to be $30bn, which would keep the current account deficit to $15bn, he added.
Elaborating on his talks in Saudi Arabia, Ismail said he had met with the Saudi finance minister where two to three issues were discussed.
Firstly, Ismail said he had requested that the Saudi deposits, due for repayment in December, be renewed. He said he was told that the request would be sent to the Saudi royal court for approval.
Secondly, the finance minister said he had urged that the Saudi oil facility be extended. He added that talks were ongoing on this issue.
Thirdly, he said a request was made for additional Saudi deposits. “They have presented an offer which I don’t want to mention at the moment. It is a very positive development but there hasn’t been a final decision so I won’t be able to talk further on it,” Ismail said.