Govt's abrupt change of heart on fuel prices stirs controversy
People wait for their turn to get fuel at a petrol station in Peshawar January 30, 2023. PHOTO: REUTERS/FILE
The government’s abrupt change of heart on petrol prices late into the night stemmed from a strong disagreement between the prime minister and the finance minister after the latter pushed the premier to reconsider its decision amid talks with the IMF, insider sources disclosed on Saturday.
Meanwhile, the government is facing staunch criticism from various quarters for releasing a late-night statement on petroleum prices.
Opponents of the government in political circles allege that the administration is merely a puppet in the hands of the IMF as the stringent conditions of the lender have left the government hamstrung, unable to respond adequately to plummeting oil prices in the global market.
Similarly, under the pressure of international financial institutions, the government initially raised hopes by promising significant reductions in petroleum prices, only to deliver a paltry decrease, leaving the public feeling shortchanged.
Sources revealed that while the finance minister pushed for a reduction in line with global market trends and recommendations from the Oil and Gas Regulatory Authority (Ogra), the prime minister aimed for complete relief.
However, the finance minister hesitated, citing ongoing negotiations with the International Monetary Fund (IMF) as a potential complication.
Read also: After initial gaffe, govt notifies cut in fuel rates
According to sources privy to the matter, the finance minister persistently urged the prime minister to reconsider while holding back the issuance of the notification until past midnight.
Eventually, the government proceeded with reduced prices as per Ogra's suggestions.
The government found itself in a pickle, facing public and political backlash for a sudden about-turn in its stance on petrol and high-speed diesel (HSD) prices, resulting in a reduction far below the initially touted figures.
Earlier, after a night marked by confusion and conflicting reports between the finance ministry and the PM Office, the government ultimately slashed petrol and HSD prices by Rs4.74 and Rs3.86 per litre, respectively.
The adjustment sharply contrasted with the earlier promise of Rs15.39 and Rs7.88 per litre reductions, drawing protest and criticism.
Read: Govt likely to further slash petrol prices
Reports had also suggested that the discrepancy apparently arose from an administrative blunder after the office inadvertently presented an outdated decision from May 15, which had already implemented the larger price cuts.
On the other hand, sources within the Prime Minister's Office revealed that the summary forwarded to the prime minister originated from the finance ministry. However, the figures contained in this summary pertained to a previous revision, and it was noted that the relief granted to the public on May 15 exceeded Rs15.
Upon receipt of the summary, the prime minister, smelling a rat, opted to double-check the figures. Subsequently, it dawned on the finance ministry, following a substantial drop in petroleum prices, that they had made an error, PM Office sources said.
Acknowledging the mistake, the finance ministry promptly reached out to the PM Office and dispatched a revised summary for the prime minister's endorsement.
However, while sources in the PM Office are sounding alarm bells, alleging misinformation regarding the prime minister's involvement in reducing petroleum prices, adding that the prime minister has launched an inquiry.