COUPLED with a cut in the development budget and savings in other expenditures, it’ll bring the government around Rs237 billion during the four months through June to absorb the impact of relief measures blazoned by the high minister on Monday.
The crucial factors of the relief measures blazoned by the high minister included an Rs10 per litre reduction in petrol and diesel prices, Rs5 per unit cut in electricity rates, besides externships and literacy and duty concessions for diligence.
Officers involved in finalising the policy measures for the high minister’s speech told Dawn that the backing cost of the relief package would be met through four avenues. These include a reduction in development expenditure, diversion of tips of government-possessed commercial realities, unspent finances out of$1.4 bn exigency support extended by the International Monetary Fund (IMF), and a bumper handed in the Rs550bnmini-budget blazoned by the government in December.
On the other hand, these measures would not impact the financial deficiency limit of6.9 per cent estimated under the IMF programme in the wake of an increase in the GDP size following a recent rebasing exercise.
A prophet for the finance minister, Muzzammil Aslam, said he was doubtful how the IMF would respond to the relief measures, but it should have no expostulation because “ we aren’t going to increase financial deficiency” and make adaptations in expenditure while staying within the limits.
He said the total impact of the package was estimated at about Rs250bn which would be net off within the budget.
Another functionary said the finance minister had formerly blazoned about an Rs33bn bumper in the budget in his December’smini-budget speech. There were some advanced-than-estimated profit collections on account of the pullout of GST immunity.
He said the impact of Rs10 per litre reduction in petrol and diesel prices would mean a yearly impact of about Rs15bn grounded on average deals of about1.5 bn litres. This works out at Rs60bn in four months.
In case of an increase in transnational prices, the impact would go over and may resultantly jack up the overall fiscal impact to Rs250bn.
An increase of$ 1 per barrel in global canvas prices roughly works out at Rs1.20 per litre in domestic price. He said there were expedients that transnational canvas prices would come down in the near future if progress is made on Iran’s nuclear addresses and Russia-Ukraine addresses.
Likewise, the Rs5 per unit cut in electricity rates would be covered through funded subvention worth about Rs17.5 bn per month and would be extended to consumers falling in the alternate to fifth orders (or those generally consuming 200 to 500 units per month).
The lower crossbeams are formerly called‘ defended through a being subvention. This translates into Rs70bn for four months. The accretive impact of petroleum products and electricity relief would therefore come to about Rs130bn.
Another Rs93bn fiscal impact is assumed against a profit loss on account of non-recovery of petroleum tax and lower GST on petroleum products. These three heads work out at about Rs223-225bn.
The major bumper was formerly available within the Ehsaas Ration Programme imaged at Rs120bn, but since its rollout was still in the testing phase, a major portion would move into the coming financial time.
Officers said the government had before considered furnishing a direct subvention on petrol to druggies of cabs and motorbikes but the idea was opposed by the finance ministry because of lesser chances of pilferage.
Energy Minister Hammad Azhar said the energy cost adaptations incurring on electricity bills due to advanced imported energy costs would be absorbed by the government for domestic and marketable consumers, whereas petrol and diesel price cuts would be acclimated through a reduction in petroleum development tax in the short term and also by a funded subvention.
An elderly energy ministry functionary said the petroleum tax had been brought down to zero on all products except petrol where it now stands at Rs1.81 per litre.
Rather, the government would now give price discriminational claims (PDCs) to canvas companies at the rate of Rs2.28 per litre on high-speed diesel (HSD).
As of now, the per-litre petroleum tax was Rs17.92 on petrol and Rs13.30 on HSD. Thus, canvas marketing companies will take a megahit of Rs2.2 bn per month on HSD that would be reimbursed to them by the government after the stage. A well-allowed-out process would be developed by the petroleum division and the Canvas and Gas Regulatory Authority (Ogra) for PDC.
Meanwhile, the finance ministry notified the price cut and fixed the ex-depot trade price of petrol at Rs149.86 per litre rather than Rs159.86.
The per-litre-depot price of HSD has been reduced to Rs144.15 from Rs154.15, that of kerosene by Re1 to Rs125.56, and that of light diesel canvas by Rs5.66 to Rs118.31.
The finance ministry said an “ unknown increase” in transnational prices above$ 100 per barrel was parlous for the domestic energy prices and affectation. “ The situation leaves veritably many options for the government” as the government had left Rs70bn per month in lost profit on petroleum products while Ogra had recommended a Rs10 per litre increase in the petroleum products prices for the coming fortnight.
