ISLAMABAD: The government has decided to maintain the petroleum prices next month, and proposed increase in prices by Oil and Gas Regulatory Authority (OGRA) would be adjusted by reducing GST from existing 27 per cent to 18 per cent. Addressing a news conference here on Friday, Finance Minister Ishaq Dar said that as per directives of Prime Minister Nawaz Sharif sales tax rate would be changed to minimize the increase in petroleum prices. He added that additional impact would be adjusted through Petroleum Levy to maintain the current prices next month.
The government had increased GST from 17 per cent to 27 per cent to minimize revenue loss on account of reduction of petroleum prices. Finance Minister further stated that OGRA has recommended in a summary for an increase of Rs 5.59 rupee per liter in price of motor spirit, Rs 12.62 in Hi-Octane, Rs 7.32 in kerosene oil and Rs 5.50 per liter in diesel price for the next month. The OGRA has also recommended Rs 5.49 liter reduction in the price of high speed diesel. He said that the Ministry of Finance would prepare a new summary as directed by the Prime Minister for adjustment in the GST to maintain the current prices for the next month. He said that the revenue impact through adjustment of petroleum levy and GST would be very nominal. Dar added that Finance Ministry and Federal Board of Revenue (FBR) would complete necessary legal and constitutional requirements by today (Saturday) in this regard.
Ishaq Dar said that Pakistan is now entitled to IBDR financing after three years by achieving $16 billion foreign exchange reserves. The country will be able to have access to $2 billion IBDR in four years with annual access of $500 million. Additionally, he added that Country Strategy Partnership 2015-19 with the World Bank (WB) also involves around $11 billion. The Minister maintained that the country is now in safe territory in terms of foreign exchange reserves, but was visibly upset to a question that the government has achieved $16 billion foreign exchange reserves by taking loans. He said that Financial Action Task Force (FATF) in its plenary meeting in Paris has decided to remove Pakistan from grey list after the government fulfilled their condition with respect to counter-terrorism financing. He added that the Pakistan has been listed in white category. The Minister further stated that Pakistan has reduced the threshold of monitoring banks transactions from Rs 2.5 million to Rs 2 million.