ISLAMABAD: The prices of petroleum products are likely to rise again as Adviser to Prime Minister on Finance and Revenue, Shaukat Tarin announced increasing petroleum development levy (PDL) by Rs4 every month, as has been agreed with the International Monetary Fund (IMF).
“IMF had demanded Pakistan to raise a revenue of Rs600 billion through PDL. We have to increase PDL by Rs4 every month to take it to Rs30,” said the Finance Adviser while addressing a press conference in Islamabad along with Energy Minister Hammad Azhar on Monday.
Tarin’s statement in this regard came hours after the IMF announced that a staff-level agreement had been reached with the government that would help revive the $6-billion funding programme stalled since April this year.
Earlier this month, Prime Minister Imran Khan had rejected the Ministry of Finance’s proposal seeking a hike in the prices of petroleum products in a bid to boost revenue.
It may be noted that petroleum prices in Pakistan have touched an all-time high with petrol being sold at Rs146 per litre.
In today’s presser, Shaukat Tarin said that the government would ensure that the legislation pertaining to the State Bank of Pakistan’s (SBP’s) autonomy was passed under an agreement with the International Monetary Fund (IMF).
The legislation will give unprecedented autonomy to the State Bank of Pakistan to target inflation, rather than economic growth.
He said the reforms would elaborate on the SBP’s responsibilities, with one of its primary objectives being helping with price stability. “The SBP would independently make decisions regarding the monetary policy and exchange rate policy,” he added.
However, Tarin said, the IMF had intimated the government that reforms were likely to increase difficulties for lower-income groups. The IMF, he said, had suggested to give “targeted subsidies” to address this issue.
Talking about the agreement, the Finance Adviser announced that IMF would release around $1 billion after Pakistan “successfully reached an agreement” with the international lender.
He said he personally believed in broadening the tax base instead of “tax pyramiding”. “Increasing electricity tariffs creates issues. It makes industrial sector uncompetitive and puts burden on poor people,” he added.
Speaking on the occasion, Energy Minister Hammad Azhar said as part of the agreement with the IMF, the electricity tariffs will be increased after a few months.
“We have recently increased the base tariff and after a few months the increase will be much lower than the last one,” he added. The minister said the agreement with the IMF will further stabilise the economy.