The Cabinet, which is scheduled to meet on Wednesday, is expected to approve 100 percent increase in inland postal tariff from next month, official sources told Business Recorder. Last time, it was in 2001 that postal tariff was revised.
Pakistan Post Office Department (PPOD) is of the view that the current postal tariff has become inconsequential due to revision in pay scales and grant of certain fringe benefits to government employees during last eight years as well as rise in petrol prices, commodities and services.
In August 2007 a proposal for revision of inland postal tariff was submitted to the Cabinet, which was turned down. PPOD had been advised to chalk out a comprehensive business plan, designed to ensure full cost recovery.
At present, PPOD owns about 3900 office/residential buildings throughout the country. According to the PPOD, a minimum expenditure of Rs 500 million is required on maintenance of these buildings every three years. Further, a project of computerisation of the post offices during the next three years at an estimated cost of Rs 500 million is under process. Moreover, proposal for opening of new post offices involving annual expenditure of Rs 348 million is also under process to provide postal facilities in every Union Council.
In conformity with government policy directive, the department has been generating surplus revenue by undertaking additional functions and by reducing its expenditure. "Though Pakistan Post has become a self-supporting department from 1998-99 onwards, the existing level of its surplus earning is not sufficient to absorb the additional burden due to increase in pay, allowances and pension benefits granted by the government to its employees from time to time and further strengthen and modernise its network," sources said.
PPOD further argued that the service charges of different private couriers operating in the country are many times higher than the postage rates of 1-5 kg being charged by Pakistan Post and other couriers like TCS, OCS and Leopards.
Since more than 80 percent of letter and mail tariff is business related and only less than two letters per capita per yesr emanate from domestic and personal correspondence, the revision of tariff would have a very insignificant bearing on the common man, sources quoted Secretary, Postal Services, Muhammad Ahmed Mian, in justification for the upward revision of tariff.
"Revision of existing postal tariff has become unavoidable which is required to be regulated by the government on the basis of operational cost. Presently, the operational cost of transmission of an unregistered postal article comes to Rs 8," sources added. The Ministry of Postal Services has proposed that initial postage on an ordinary letter should be revised from Rs 4 to Rs 8 with proportionate increase in rates of other categories of inland postage.
Sources said that the Prime Minister during his recent visit to the Ministry of Postal Services had given consent of proposed revision of inland postage tariff with the advice to move a summary for the Cabinet.
If the proposal is approved in its present form, the rate of up to 20 grams letter will increase from Rs 4 to Rs 8, up to 50 grams from Rs 7 to Rs 15, up to 100 grams from Rs 10 to Rs 20, up to 250 grams from Rs 15 to Rs 30, up to 500 grams from Rs 20 to Rs 40, up to 1000 grams from Rs 30 to 60 per kg, up to 1500 grams from Rs 40 to Rs 80 and up to 2000 grams from Rs 50 to Rs 100. PPOD's earning is Rs 230 million, given the prevalent tariff, which will increase to Rs 714 million. Total expected additional revenue is Rs 880 million.
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