Federal cabinet defers hike in gas prices

Information minister denies increasing income tax on salaried class

ISLAMABAD: The federal cabinet on Thursday remained indecisive on the issue of increase in the prices of gas as Prime Minister Imran Khan sought more clarifications from the authorities concerned.

The clarification the prime minister has sought deals with calculating and determining adverse impact of the proposed price hike on consumers.

Later briefing the media, Information Minister Fawad Chaudhry said ‘so far’ no such decision has been made on either to increase gas and electricity prices or to enhance income tax on the salaried class.

Rebutting the media reports, the minister said, “It is against the government’s ‘philosophy’ to further burden the salaried class, farmers, and the lower income groups of society financially.”

Meanwhile, the federal cabinet with PM Imran in the chair took up a nine-point agenda that included ratification of decisions taken by the Economic Coordination Committee (ECC) of the cabinet in its meeting held on September 10 which was chaired by Federal Minister for Finance Asad Umar.



The ECC had left the final decision to increase prices of gas by up to 186 per cent to the prime minister due to political nature of the move and objections raised by the Sindh government.

“The issue comes under discussion in today’s meeting. However, the prime minister asks the minister concerned to furnish in detail the exact impact of possible price hike on domestic consumers,” a cabinet member said.

The prime minister also directed preparing a subsidy formula to save domestic consumers should the government approve hike in gas prices in the near future, he added.

The cabinet also ratified another decision of the ECC that involves the import of 100,000 metric tons of fertilisers to meet the Rabi season crops need. “Import of urea will cost the government around Rs3.5 billion,” minister told.

He said the previous government did not ensure sufficient gas supply to the urea manufacturing plants in the summer season that resulted in its shortage, adding despite that it allowed its export that further aggravated the situation.

Chaudhry said it has also been decided that local urea manufacturing plants would also be provided enough gas supply up to November 15.

The cabinet also decided to hire the services of international forensic auditors to assist the Assets Recovery Unit that was formed to identify and bring looted public money stashed in foreign countries back.

The meeting also approved exempting dams fund from income and withholding taxes. The information minister said the cabinet has given full credit of initiating dam’s fund to the chief justice of Pakistan, adding the government was just supporting the CJP’s cause.

Metro bus projects

While, giving details about the subsidy amount the Punjab government had been sharing to keep the metro buses on tracks in Lahore, Multan, Rawalpindi and Islamabad, the minister said the Punjab government would decide if it wants to continue the public transport projects or not.

The federal government had announced conducting special audit of all urban mass transit projects in the country.

“Today, the cabinet has been informed that the Punjab government has been bearing around Rs8.5 billion subsidy annually on the metro bus projects,” he said.

Giving a break-up, he said Rs4.2 billion annual subsidy is given against the Lahore metro bus project, Rs2.1 billion on the Multan metro bus project and Rs2 billion on the Rawalpindi/Islamabad metro bus project.

“It’s not the federal government but the Punjab government that will have to decide if it can continue to provide over Rs8 billion subsidy annually to keep the buses on track or not.

“If it [the Punjab government] think they can further sustain such subsidies, they will continue; otherwise, they would stop it,” he said to a question if the government intends to shut services.

To a question, Chaudhry said the Punjab finance minister would be in a better position to inform if the province would continue funding the projects.



He said the Peshawar metro bus project would be completed at a cost of Rs67 billion, which includes Rs10 billion incurred on the purchase of buses.

He said the Khyber-Pakhtunkhwa government had decided that not a single penny would be given as subsidy to run the project due to the financial model of the project.

He said the government would have to give an estimated Rs3.5 billion annual subsidy to successfully run the Rs250 billion Orange Line train project in Lahore.

Other decisions

The cabinet has also approved the names of members of the PTV board of governors. The 10-member Board of Governors will also include DG ISPR as one of its members.

The board will be headed by its chairman (information minister), while the information secretary will be its vice-chairman. Other members will come from government and private sector experts.

The cabinet also approved Haroon Sharif as chairman of the Board of Investment.

The cabinet also approved abolishment of the Capital Administration and Development Division and its functions have been distributed among other departments.

The Capital Development Authority has been given under the administrative control of the Ministry of Interior.

The minister said according to an initial suggestion, four helicopters present in the Cabinet Division’s pool will be given to NDMA for their utility as air ambulances.