Thursday May 05, 2022

Miftah Says PTI Govt Left Circular Debt of Rs2600 on Electricity

Finance Minister Miftah Ismail on Thursday said that government will try to maintain prices of petroleum products but reiterated that continuing to subsidize the commodity was difficult for the government.

Addressing a press conference in Karachi, Miftah said that in the month of May alone, the federal government would shoulder Rs102 billion in subsidies.

To put things into perspective, he said that the entire civilian government expenditure for a month were Rs45 billion per month and hence the subsidies amounted to running three and a quarter governments.

The tax collection could not cover this cost and the government has to borrow Rs102 billion from the market or from the State Bank of Pakistan, which effectively means printing the money, the finance minister said adding that the government was not allowed to borrow money from the SBP anyways.

The finance minister said that the previous government had promised to the IMF to levy Rs30 per litre PDL on petroleum products and on top of that 17% sales tax, but it then lied to people and financed the subsidies from national exchequer. 

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