KARACHI:
Federal Finance Minister Hafeez Sheikh announced on Thursday that the recent increase in the prices of petroleum products will be slashed by 50 per cent.
The late-night announcement of this cut came after the finance minister held detailed negotiations with the Muttahida Qaumi Movement (MQM) delegation at the Sindh Governor House.
A notification of the price cut was, however, not issued immediately and is expected to be released some time on Friday.
The talks were held in the backdrop of telephonic discussions between MQM chief Altaf Hussain and President Asif Ali Zardari. Sheikh was assisted in the talks by Interior Minister Rehman Malik while the MQM team was led by its parliamentary leader Dr Farooq Sattar.
Hafeez Sheikh told a news briefing after the talks that even though international oil prices started climbing following turbulence in the Afro-Arab world, the government kept steady the domestic prices. In doing so, the government had to give Rs5 billion subsidy in January and Rs8 billion in February to absorb the shock and give relief to the public.
However, since international prices have risen 26 per cent since November, the government decided to pass on only up to 9.9 per cent of the impact at the end of February. Still the government decided to continue giving subsidy of up to Rs5 billion from the national However, President Zardari was approached by MQM chief Altaf Hussain who briefed him of the immense difficulties the people were bound to face because of the fuel price rise.
Therefore, after discussions, the government has decided to cut the fuel price hike by 50 per cent and bear the financial burden itself.
He said we should hope that international prices stabilise in the days ahead so the government could give more relief to the public.
Interior Minister Rehman Malik urged the transporters to withdraw their strike call for Friday after the government announced relief in fuel prices.
Sindh Governor Ishratul Ebad and MQM’s parliamentary party leader Farooq Sattar briefed the media in detail of the efforts made by the party chief Altaf Hussain to ease the pain of price rises.
Earlier, the MQM-government talks were held till late night. The MQM was pressing the government side to reverse the fuel prices to the level they were pegged at before the raise was announced. This resulted in a long-drawn-out discussion.
The MQM team included Dr Farooq Sattar, Hyder Abbas Rizvi, Babar Ghauri, Syed Sardar Ahmed and Abdul Rashif Godal. Governor Sindh Dr Ishratul Ebad Khan was also present on the occasion.
Sources said that Finance Minister Hafeez Shaikh reportedly tried to persuade the party about the financial constraints faced by the government in view of which it was pretty hard for the government to continue giving subsidy on petroleum prices.
At one point, the minister reportedly agreed to reduce prices by three per cent. However, the insistence of the party resulted in a larger quantum of relief.
Earlier, President Asif Ali Zardari met Finance Minister Hafeez Shaikh and Governor State Bank of Pakistan Shahid H Kardar at the Zardari House in Karachi. During the meeting the minister briefed the president about the consequences if prices of POL were reversed to the previous level.
Sources said that they briefed the president that government cannot afford to give more subsidy on POL. The President, sharing with them the concerns of the MQM and other quarters directed the finance minister to listen to the concerns of the MQM and resolve the matter amicably.
Presidential spokesperson Farhatullah Babar said that the economic managers briefed the President about the state of the economy and the steps being taken to address the challenges. The President emphasized the need for enlarging social safety net for the poorest of the poor, broadening the tax base and giving special incentives for attracting remittances from overseas Pakistanis through regular banking channels.
The President said that during his meeting in Kuwait with Turkish President Abdullah Gul had offered to send his Minister to Pakistan to examine participation in the shares based bonds soon to be floated by Pakistan. The President stressed for early completion of preparations for floating bonds, he said.
Earlier Governor Sindh, Dr. Ishratul Ebad Khan and Shahi Syed, President Awami National Party (ANP) held separate meetings with president at the Bilawal House. Sources said that the agenda of both the meetings was fuel prices. Talking to The Express Tribune, Shahi Syed said that they briefed the President Zardari about transporters concerns.
Published in The Express Tribune, March 4th, 2011.
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