Photo courtesy PID
Prime Minister Shehbaz Sharif on Thursday announced the government is expanding exemption to fuel adjustment charges (FAC) in bills for August to consumers using under 300 units of electricity.
“This will cover 75 percent of [electricity] consumers across the country,” he told Pakistan Muslim League (Nawaz) MPAs and MNAs in Islamabad. “In the first stage, power users consuming 200 units [or less] were given an exemption and the government was bearing a burden of Rs. 21 billion. But it only covered 48-52 percent of users,” he said of his earlier exemption announcement. “I believe that this [exemption] will matter once we increase it to 300 units,” he added.
Detailing the “tough” conditions his government had inherited when it came to power in April, the prime minister slammed the ousted Pakistan Tehreek-e-Insaf (PTI)-led government, accusing it of failing to take advantage of global trends. “During COVID, gas across the world was being sold for peanuts,” he said, lamenting that instead of securing long-term deals at the time, the PTI had backed the purchase of expensive oil, resulting in expensive electricity.
The situation, he said, had worsened due to the Russian invasion of Ukraine, forcing the government to purchase “extremely expensive” oil for electricity production. “Lies were spread [by the PTI] and we were brought to a never-before-seen stage, whether it was related to the livelihood of people or anything else,” he lamented, adding that the government was currently in a position where it had to secure permission from the International Monetary Fund (IMF) just to exempt FAC for consumers.
“Nations don’t survive this way,” he stressed, adding the IMF bailout could not be dismissed because it was essential for Pakistan to have a chance at standing on its feet. “I was sitting in a meeting when the minister of finance gave me the news [of IMF bailout resumption], so I told him in front of everyone that Pakistan was saved from default,” he said.
The much-needed revival of the IMF’s suspended Extended Fund Facility for Pakistan, said Sharif, was necessary but was not a cause for happiness. “It is not a good thing because Pakistan is taking more debt. But at least we were saved from a default, which is what [PTI Chairman] Imran Khan wanted,” he said, referring to a letter sent by Khyber-Pakhtunkhwa Finance Minister Taimur Jhagra to the Finance Ministry in which he had sought to renege from an earlier commitment to return surplus to the central government, as required by the IMF. The move has widely been seen as an attempt by the PTI to scuttle the IMF deal and damage the national economy.
“A man who gets letters written just so the IMF program could fail … is there a worse way to show hatred for the country?” he questioned, adding that Pakistan could not afford to be continue operating in the manner it had been run under Khan. Without specifically naming the security establishment, he referred to the support it had provided Khan during the PTI’s tenure in government, stressing no other political leader had been so facilitated in the country’s 75-year history.
“The extent to which he was supported … if a cult has been formed, God will find a way to rectify it,” he said, stressing the nation now had to decide whether it wanted to side with the “truth” or “falsehood.”
On the petroleum price increase notified by the government a day earlier—to much criticism due to a reduction in global oil prices—Sharif said it was a “painful” reality that was outside his control. Claiming he had spent an entire night deliberating on it, the premier said it had finally been agreed to impose an increase in the most “humane way” possible.
“We calculated everything carefully, and the Rs. 2 increase is the least increase I could manage,” he said, adding this reflected the difficulties facing the incumbent government.
Summarizing the government’s fiscal concerns, Sharif said the government had spent more than $20 billion to purchase this oil. “Despite all this,” he stressed, “I want to assure you we won’t lose hope.”
Floods
Discussing the floods that have left more than half the country underwater, the prime minister said he had never before seen so much devastation in his life. “Water has wreaked havoc everywhere from Sukkur to Jaffarabad,” he said, noting floods had washed away buildings in the country’s north and all tourist destinations were now in disrepair.
“But let me assure you all teams … the NDMA and everyone else are working day and night to rehabilitate and rescue the flood victims,” he said, reiterating that all affectees would be given Rs. 25,000 as compensation via the Benazir Income Support Program. “This amount will increase,” he vowed, adding this was apart from the Rs. 15 billion grant announced for Sindh; and Rs. 10 billion each for Balochistan and Khyber-Pakhtunkhwa.
The prime minister stressed the government would need money for rehabilitation after the waters had receded, regretting crops had been damaged and houses reduced to rubble.