POL prices to be increased again: Dar

Source: The News


Sunday, April 27, 2008

By Aftab Maken

ISLAMABAD: Finance Minister Ishaq Dar on Saturday made it clear to the parliamentarians that the POL subsidy had to be done away with and the whole brunt of the skyrocketing POL prices would have to be passed on to consumers before the end of the new fiscal year.

Responding to queries raised by a senator in the Senate Committee on Finance, Senator Ishaq Dar said the government would not further absorb Rs 18-20 per litre subsidy on POL and would pass it on to the end users gradually.

In order to bridge the burgeoning gap regarding the balance of payments, the minister informed the committee that the government was arranging $3 billion, and in this regard the Asian Development Bank (ADB) had pledged one billion dollars. However, he ruled out knocking the doors of multi-donor agencies for balance of payments.

To a question by one of the members about the economic managers of the previous government who were now part of the present economic team as well, the chairman of the committee said that those who were responsible for economic mismanagement should resign.

Giving a break-up of the total shortfall of Rs 557 billion in the upcoming budget, Ishaq Dar said the oil subsidy would eat up Rs 157 billion against the budgetary allocation of Rs 15 billion, electricity subsidy would soar to Rs 123 billion against Rs 52 billion, wheat subsidy to Rs 45 billion against no allocation in budgetary estimates; Rs 125 billion for interest rate on domestic debt with no mention in budget documents, Rs 32 billion for R&D with no mention in the budget and Rs 75 billion as miscellaneous expenditure mainly for Swat and Wana operations.

Ishaq Dar said the government would halt the development budget and also supplementary grants to the federal departments and divisions.

The finance minister, during a presentation on “bankruptcy draft law” by Governor State Bank Dr Shamshad Akhtar, objected to the reporting of media persons and asked the committee to intervene. The chairman of the committee with the consent of members allowed the media to cover the event but later decided against it, keeping the sensitivity of the issues in view.

Senator Nisar Memon of the PML-Q objected to the finance minister’s viewpoint and reminded him of his party’s stance on the issue, saying that the ruling coalition always supported the free media policy and demanded coverage of even more sensitive issues on defence and security.

Secretary Finance Dr Waqar Masood also gave a detailed presentation on the current economic situation of the country.