Tag: Economic Relief

  • Govt may cut petrol price by more than Rs10 per litre

    Govt may cut petrol price by more than Rs10 per litre

    The government is poised to provide significant relief by potentially reducing petrol and diesel prices by Rs13 and Rs15 per litre, respectively, in the upcoming fortnightly pricing update.

    This anticipated reduction is attributed to a noteworthy downturn in international petroleum and diesel prices over the past fortnight.

    The stability of the local currency at a weighted average of approximately PKR 284.33 per USD further contributes to this potential relief. 

    Current estimates as of December 2008 reveal a global decline in petrol and diesel prices by 5.44 per cent and 5.6 per cent, reaching $94.95 and $100.05 per barrel, respectively.

    As the next pricing update is still a week away, the future trajectory of these prices hinges on global market movements and exchange rate fluctuations. 

    Notably, in the preceding fortnight, the government maintained the petrol price at Rs281.34 while reducing the HSD price by Rs7 to Rs289.71 per litre.

  • Islamabad’s public transport fares reduced by 10% 

    Islamabad’s public transport fares reduced by 10% 

    With immediate effect, public transport fares in Islamabad have been reduced by 10 per cent in direct response to the recent decline in petroleum prices.  

    This decision emerged following a meeting convened by the Secretary of the Islamabad Transport Authority, involving consultations with representatives from the Drivers Welfare Association as well as transportation business owners. 

    This fare reduction is poised to make a significant impact, encompassing 23 distinct routes crisscrossing the capital city of Islamabad. It serves as a vital measure to alleviate the financial burden borne by commuters in the region. 

    Notably, this benevolent gesture is mirrored in Lahore, where transport operators have also undertaken fare reductions for both long-haul and short-haul journeys. 

    Furthermore, as part of its ongoing commitment to ease the economic challenges facing the populace amidst escalating inflation, the caretaker government took decisive action on Sunday.  

    This action involved a substantial reduction in petrol price by a notable Rs40 per litre and an equally substantial reduction of Rs15 per litre for high-speed diesel (HSD) over the forthcoming two weeks.  

  • IMF’s ‘yes or no’ decision nears on relief for electricity bills

    IMF’s ‘yes or no’ decision nears on relief for electricity bills

    In the midst of extensive protests regarding soaring electricity charges, the interim government has reportedly devised a strategy aimed at alleviating the financial burden on electricity consumers in the country.  

    According to Geo News, the interim government is preparing a relief package that will grant up to Rs3,000 in relief to customers who use up to 300 units of electricity in their October bills. Furthermore, those facing electricity bills between Rs60,000 and Rs70,000 stand to benefit from a significant reduction of Rs13,000. 

    Simultaneously, discussions between the International Monetary Fund (IMF) and the interim government are ongoing, focusing on providing relief to electricity consumers. 

    In a separate report by The News, it’s revealed that the IMF, headquartered in Washington, has requested additional data from the Power Division to inform its decision regarding various proposals to address the impact of high bills in August and September. 

    “We have shared the required data with the Fund people hoping that IMF may today (Monday) come up with its response with a yes or no to the assertions of the Finance and Power Divisions, seeking permission for relief to inflation-stricken people in electricity bills,” shared sources involved in discussions with the IMF. 

    Currently, officials from both the Power and Finance divisions are engaged in intensive discussions with IMF representatives, considering the data associated with proposed measures to alleviate power tariffs and their potential effects on circular debt, cash flow, and potential delays in Independent Power Producers (IPPs) payments, ensuring the stability of the power sector. 

    In response to continuous protests by citizens and traders against soaring power bills and added taxes, the government is actively seeking to convince the global lender to grant immediate relief to electricity consumers in a nation already grappling with severe inflation. 

  • Painful IMF compliance, but no new taxes on agriculture and real estate, clarifies Dar

    Painful IMF compliance, but no new taxes on agriculture and real estate, clarifies Dar

    Finance Minister Ishaq Dar made a resolute declaration on Thursday, assuring the public that the coalition government, despite having taken stern measures that burdened the masses, has no intentions of imposing additional taxes on the agriculture and real estate sectors.

    Speaking passionately on the floor of the National Assembly, Dar firmly stated, “I want to state categorically […] that no new tax will be imposed on agriculture or real estate. We have endured much pain in meeting the IMF’s conditions.”

    This assurance comes in the wake of the International Monetary Fund (IMF) approving a $3 billion bailout program for Pakistan, with $1.2 billion already disbursed to help stabilise the nation’s struggling economy.

    Media reports had indicated that the IMF requested a plan from the government to impose taxes on the real estate and agricultural sectors as a condition to release the remaining funds. The news caused concern among those associated with the agriculture sector, especially since the government had expanded the loan volume to support it in the budget.

    Dar emphasised that all prior actions demanded by the lender had been successfully completed, and the agreement with the IMF was carried out in a transparent manner. He reassured the public, “No further burden will be passed on to the people. All the commitments made with the IMF are available on the finance ministry’s website.”

    The positive effects of the deal are already evident, with investors in the country experiencing relief in the stocks, exchange rate, and bonds markets. Additionally, longstanding allies Saudi Arabia and the United Arab Emirates have recently deposited $3 billion in Pakistan’s central bank, while China rolled over $5 billion in loans over the past three months to prevent the country from defaulting.

    In light of the IMF’s observation that both agriculture and construction sectors are under-taxed in Pakistan, economist Khaqan Hassan Najeeb stressed their significance in broadening the tax base and promoting progressivism.

    Regarding the real estate sector, Najeeb advocated for a genuine capital gains tax, levied at the marginal income tax rate of the individual making the capital gains over the years, to encourage investment from unproductive real estate to more productive sectors like manufacturing.

    Read more: Pakistan’s petroleum dealers temporarily postpone nationwide petrol pump shutdown

    However, Najeeb acknowledged that such reforms would be better suited for implementation by a long-term new government after the upcoming elections. Moreover, he highlighted that provincial governments hold authority over agriculture income tax, which presently contributes only insignificantly. He urged provinces to contemplate a progressive income tax on agriculture, considering the size of farm holdings.

    With Minister Dar’s assurance and the IMF’s support, Pakistan’s economic prospects seem brighter, but the road ahead calls for careful consideration and judicious decision-making to ensure a sustainable and progressive financial future.

  • IMF reaches $3 billion stand-by arrangement with Pakistan, averting impending default

    IMF reaches $3 billion stand-by arrangement with Pakistan, averting impending default

    The International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement on a stand-by arrangement worth $3 billion, announced the lender. This decision has been eagerly anticipated by Pakistan, a South Asian nation that is on the verge of default.

    The approval of the IMF board, expected in July, is required to finalise the deal. After an eight-month delay, this agreement brings some relief to Pakistan, which is currently grappling with a severe balance of payments crisis and dwindling foreign exchange reserves.

    The funding of $3 billion, which will be disbursed over a period of nine months, surpasses initial expectations. Pakistan had been awaiting the release of the remaining $2.5 billion from a $6.5 billion bailout package that was initially agreed upon in 2019, and which expired on Friday. As a result, the country’s stock and currency markets remained closed on that day.

    According to IMF official Nathan Porter, the new stand-by arrangement builds upon the 2019 programme. Porter acknowledged the significant challenges faced by Pakistan’s economy in recent times, including devastating floods last year and rising commodity prices following the war in Ukraine.

    He stated, “Despite the authorities’ efforts to reduce imports and the trade deficit, reserves have declined to very low levels. Liquidity conditions in the power sector also remain acute.” Porter further emphasised that the new arrangement would serve as a policy anchor and a framework for financial assistance from both multilateral and bilateral partners in the foreseeable future.

    Porter also highlighted the acute liquidity conditions in the power sector, characterised by mounting arrears and frequent power outages. Reforming the energy sector, which has accumulated a debt of nearly 3.6 trillion Pakistani rupees ($12.58 billion), has been a pivotal aspect of the discussions between Pakistan and the IMF.