ISLAMABAD:
Finance Minister Miftah Ismail said on Saturday that the incumbent government’s relief package ‘Sasta Petrol Sasta Diesel’, as announced by Prime Minister Shehbaz Sharif, would protect poor families from the “storm of inflation” left by the previous government and the recent hike in fuel prices.
During a press conference, the finance minister outlined that the PML-N government’s relief package targets households led by women with a monthly income of less than Rs40,000.
According to Miftah, these women could text their CNIC number to 786 or call the number to receive an additional Rs2,000.
He maintained that the government could not provide complete relief to the people due to budget restraints, but that they did want to provide some salvation.
“The amount of money going towards the programme will also be incorporated in the upcoming budget, to be presented before the National Assembly next month,” Miftah said.
The premier’s new package will also incorporate the Benazir Income Support Programme (BISP), and BISP recipients need not send their CNIC numbers on the dedicated line as they would automatically receive the money on June 1, he further said.
“Under the package, 14 million households would receive the amount. Rs2,000 will be given in June and will cost the government Rs28 billion,” he detailed, adding that besides the 3.3 million BISP recipients, the package covered 6.7 million households with a poverty score below 37.
He highlighted that the money would be given to the poorest families and would only be handed to the women of the household which he claimed was “the best way”.
According to the finance minister, the money given through the new package amounted to 5% of the income of a household earning less than Rs40,000 per month, and 8% of the income of a household earning Rs31,333 or less per month.
Miftah claimed that the previous government was giving subsidies to the rich and targeting the poor as 40% of the richest households in Pakistan used up 85% of all petrol supplies and the subsidies were on petrol prices.
He stated that according to Shaukat Tarin’s – the finance minister under former premier Imran Khan – deal with the International Monetary Fund (IMF), “all subsidies were to be removed, the tax levy increased to Rs30 and a sales tax imposed to raise the price of diesel to Rs300 per litre and the price of petrol to Rs 70 per litre”.
He reiterated that the finance ministry would not follow the previous government’s formula.
Responding to a reporter’s question, the minister stated that he was unaware of whether fuel prices would be raised again on June 1st and that a hike in fuel prices would not be appropriate as they were raised on May 26.
‘No talks of privatisation with IMF’
Answering another question, Miftah stated that there had been no talks over privatisation with the IMF, and that a “staff-level” agreement was expected by June after which the money could be deposited at any time.
“The IMF is to give $3 billion and we have asked them to extend the programme by a year and increase it by another $2 billion,” he said, adding that he expected the IMF to agree to these terms.
He maintained that the finalization of the deal with the IMF would lead to loans from other multilateral organisations.
According to Miftah, Pakistan would have defaulted because of the decrease in petrol prices by the former PTI government, and that their subsidies cost thrice the amount needed to run the entire civil government.
He stated that political capital was lost due to the price hike, but that Prime Minister Shehbaz Sharif and Minister for Defense Khawaja Asif explicated that if a choice must be made between political capital and state, the government must choose to save the state.
“Saudi Arabia is willing to help us more, but details will be shared in July,” he added.
Earlier this week, Miftah in a surprise move announced that the government was increasing petroleum products rates by Rs30 per liter, or up to one-fourth of their existing prices, paving the way for reaching a staff-level agreement with the IMF by June 12.
The unprecedented decision was said to help defuse the landmines laid by the government of former prime minister Imran Khan, on the one hand, and would save the country from looming default, on the other.
Finance Minister Miftah Ismail made the decision public in an unscheduled news conference after PM Shehbaz gave him the go-ahead in a party meeting.