Miftah warns, Pak to default if subsidies not abolished till July

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Says country facing circular debt of Rs2,500b

Minister for Finance Miftah Ismail said on Monday that the country would default if the subsidy on petrol and diesel is not withdrawn till July.

Addressing post-budget press conference on Monday, he said that the agreement with the International Monetary Fund (IMF) couldn’t be possible without withdrawing the subsidy on petrol and diesel.

The minister said that the electricity bills for the month of September will come with new rates.

Miftah Ismail said that there were economic problems when they formed the government, adding that Rs 1100 billion subsidy was given power sector due to which the government suffered a loss of Rs 1600 billion. “We are facing circular debt of Rs 2,500 billion and NEPRA is taking five months old price.

The Finance Minister warned that at present imported coal has become 400 times more expensive, adding that if fuel adjustment charges are levied in June, then such the electricity bill will be beyond expectations as the oil and coal are becoming more expensive all over the world.

Hinting an increase in the price of gas, he said that the gas departments have been facing deficit as the circular debt of the gas has reached Rs 1,500 billion, adding that there was still some capacity in gas right now but Rs 4,000 gas can t be given at the price of Rs 500. Seventy percent of household consumers are billed around 500, he said.

 

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