Photo courtesy PID
Finance Minister Miftah Ismail on Wednesday clarified that the waiver of fuel adjustment charges (FAC) for power consumers of 300 units or less was a temporary measure, but claimed electricity tariffs and overall inflation will start to decline in a month regardless.
Addressing a press conference alongside Defense Minister Khawaja Asif, he claimed power tariffs would decline in October as consumption decreased, adding quarterly tariff adjustments and FAC would also likely reduce. “This hardship will have to be borne for another month,” he said, while stressing that the prices of petroleum products would depend entirely on global oil rates.
Blaming the ousted Pakistan Tehreek-e-Insaf (PTI)-led government’s “unwise policies” for the historically high prices of electricity, he lamented it had failed to secure oil, gas or coal in advance, triggering expensive spot purchases. Referring to last month’s FAC, which saw many people’s bills double or triple, he claimed it was a result of expensive electricity produced in May because of the arrangements made by the previous government in March-April.
Reiterating that ousted prime minister Imran Khan had failed to honor his government’s commitments with the IMF, especially those related to subsidies on electricity, gas and petroleum products, Ismail said the PTI chairman had likewise granted tax amnesties to his “cronies and ATMs” to goose numbers even as all indicators indicated the economy was overheating.
To a question, the minister said the PTI-led government had failed to launch renewable energy projects and if it had done so, the power rates could have been much lower. He stressed that the government could not afford to end load-shedding, as power tariffs would become unaffordable because just running some furnace oil-based plants would cost Rs. 60/unit.
Noting the prices of onions and tomatoes had already dropped significantly after the government agreed to import the vegetables from Afghanistan and China following floods that destroyed domestic crops in Sindh and Balochistan, the finance minister regretted that no one could prepare for natural calamities but the government was striving to ensure relief for the public. To a question on the government’s discussions about reviving trade with India to tackle shortages and inflation, he said vegetables had already been secured elsewhere. However, he said, some export associations had sought cotton imports from India, and the government would consider this if other sources were not available.
IMF and election
Responding to a query about if the government was seeking emergency financial support from the International Monetary Fund (IMF) to tackle the devastation caused by the floods, the finance minister said he was in touch with the global lender, but emergency aid would only be discussed after a disaster needs assessment had been completed in consultation with the World Bank and other organizations. He said most estimates, thus far, had put losses between $10 and 12 billion.
During the press conference, the defense minister said Ismail would be elected as a senator before the expiry of his six-month term—on Oct. 16—though did not clarify which of the seats would be vacated to make room for the finance minister’s election. The prime minister, the PMLN and the entire federal cabinet, he stressed, had expressed confidence in Ismail’s performance and “this confidence is well placed and well deserved.”
Defaming institutions
During his talk, Asif also criticized PTI Chairman Imran Khan’s recent statements on state institutions, stressing no one had the right to defame them. Reiterating the politicization of institutions such as the Pakistan Army was highly objectionable, he regretted that Khan had often “used state institutions to build his own political narratives.”
Lamenting that Khan often issued controversial statements before retracting them to save face, he accused the ousted prime minister of “camouflaging his statements with excuses of context and merit.”
The defense minister clarified that all appointments in the Army are made on merit. “Imran Khan should say which, if any, appointments in the Army weren’t done on merit,” he said, questioning Khan over whether he had personally appointed anyone on merit during his tenure as prime minister.