Prime Minister Raja Pervez Ashraf has withdrawn the recent increase in petroleum prices with immediate effect, which would have an impact of around Rs 4.5 billion on revenue. The Prime Minister issued these instructions after a meeting with Minister for Finance Saleem Mandviwalla on Saturday. The Minister has briefed the Prime Minister about the overall economic situation and the compulsions and rationale behind the recent increase in petroleum prices.
He reportedly stated that the withdrawal of increase in petroleum prices would have negative impact on sales tax collection from POL products and ultimately on the fiscal deficit for the current fiscal year. The government has estimated a revenue collection of Rs 120 billion from petroleum levy in the current fiscal year and also the major chunk of GST collection is from petroleum products. The Federal Board of Revenue (FBR), according to an official of Finance Ministry is already facing a shortfall of around Rs 200 billion in revenue collection target.
The Prime Minister, however, directed the Finance Minister to immediately withdraw the recent increase in petroleum prices, as it was adversely affecting the lives of the masses. Analysts say that the ruling coalition has started taking economic decisions in the last few weeks, on political considerations and the Prime Minister decision about petroleum prices is simply its reflection.
An official on condition of anonymity said that recent decision of the Economic Co-ordination Committee (ECC) of the Cabinet to increase the margin of oil marketing companies may also have contributed to some extend to the increase in petroleum prices. The government would have to either reduce the petroleum levy or provide subsidy to absorb the recent increase in petroleum prices.
The Prime Minister further stated that the democratic government would not tolerate any additional burden on the people and would ensure provision of relief to the common man. "The Peoples Government will not put any additional burden on the common man and will do its level best to alleviate the suffering of the people", said the Prime Minister.
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