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According to Miftah, the price of power will decrease next month. Talks about the time of the next October review sessions with the IMF. Imports of Indian tomatoes and onions should be taken into account if no other sources are available.
Islamabad: Finance Minister Miftah Ismail said on Wednesday that the prime minister had ordered a delay rather than a waiver in the implementation of fuel cost adjustment (FCA) on power bills. However, she did guarantee that after a month, both inflation and electricity prices would begin to decrease.
The finance minister would be elected as a senator before the end of his six-month term on October 16 in recognition of his diligent work and unwavering efforts to pull the nation back from the verge of default and mount a formidable defense against criticism, Defense Minister Khawaja Muhammad Asif announced during a joint news conference with him.
A person may be appointed minister for a maximum of six months, after which they must be re-elected as a senator or member of parliament.
He suggested that Mr. Ismail would be elected to fill the seat that would become vacant in March 2024, when the mandates of one of the senators are scheduled to expire. He noted that Mr. Ismail’s performance has garnered the trust of the prime minister, the PML-N, and cabinet members, adding that “this confidence is well placed and well deserved.”
Mr. Ismail informed reporters that electricity rates, FCAs, and quarterly tariff adjustments (QTAs) will all decrease in October. He said that “this hardship will have to be borne for another month” and that the state of the world oil market will determine the price of gasoline and diesel.
The finance minister said that the FCA had been postponed in response to a question about whether the premier’s proposal to remove the FCA for homes consuming 200–300 units indicated a full waiver or a suspension for recovery at a later time, as well as the financial effect.
Previously, the government decided to phase in the implementation of a Rs9.90 per unit FCA for users who use up to 200 units monthly over three months.
According to the minister, after government involvement, the prices of onions and tomatoes decreased from about Rs300 per kg to over Rs100 per kg following floods that devastated fields in Sindh and Balochistan. He said that while these natural occurrences were beyond human control, they would nevertheless need to be planned primarily using resources that one already had.
When asked if the government would approach the International Monetary Fund (IMF) for emergency financial support to deal with the destruction caused by flooding, Mr. Ismail replied that he was in contact with the Fund but that the emergency was not a top priority until the disaster need assessment was finished, after consulting with the World Bank and other organizations for the rehabilitation of flood-affected people. He added that estimated flood damage ranged from $10 billion to $12 billion.
Talks for the next IMF tranche
Later, the finance minister and the head of the IMF mission had a video conference where they spoke about the most recent macroeconomic data, including losses caused by flooding.
According to Mr. Ismail and Dawn, the parties also spoke on the dates of the next review meetings in October for end-of-September performance that would support the payment of a further tranche of around $1.2 billion later in the month.
In response to a follow-up inquiry concerning the import of consumables and cotton from India in order to offset crop losses due to flooding and combat inflation, the finance minister stated that arrangements had been made for the import of onions, tomatoes, and other vegetables from Afghanistan and China and that certain export associations had also requested cotton imports from India; however, this option would only be taken into consideration in the event that other sources were unavailable.
He guaranteed that all the requirements of textile exporters would be provided to enable them to fulfill their export orders.
Mr. Ismail said that since the previous administration had not made arrangements for coal, gas, or oil ahead of time, the unfavorable lag effect of the PTI government’s “unwise policies” had resulted in historically high prices. He said that even the FCAs from the previous month were caused by the costly power generated in May as a result of pricey fuel agreements negotiated by the previous administration in March and April.
He said that Imran Khan, the previous prime minister, had broken the promises his administration had given to the IMF, particularly those pertaining to the subsidies for gas, electricity, and petroleum goods.
He said that while the economy was already overheating, Mr. Khan increased these subsidies and granted tax amnesty to “his cronies and ATMs [people allegedly bankrolling the PTI chief]” despite having promised the IMF that the previous government would not grant amnesty to businessmen and withdraw power, petroleum, and gas subsidies.
According to Miftah Ismail, the previous administration focused on something other than solar energy or other renewable energy sources. “The power rates would have been much lower had [Mr. Khan] worked on the installation of solar energy,” he said. He also added that if the government decided to stop load shedding, electricity rates would become unaffordable since certain furnace oil-based facilities, like Jamshoro, would cost Rs. 60 per unit.
He said that while the scarcity of some goods—particularly tomatoes and onions—caused a spike in costs, those prices were now beginning to decline.
