Pakistan freezes petrol, power prices despite global surge

Pakistan's Prime Minister Imran Khan.

Prime Minister Imran Khan yesterday announced a cut in petrol and electricity prices despite a steep rise in the global oil market, pledging to freeze the new rates until the next budget in June. The move comes as Khan’s opposition, already engaged in street protests over what they say is his mismanagement of the economy and rising inflation, says it is set to propose a no-confidence motion in parliament to oust him. Petrol and diesel prices will be slashed by 10 rupees a litre and electricity rates will be cut by 5 rupees per unit, Khan said in a televised address to the nation. “We have also decided to decrease electricity prices by Rs5 per unit. This means that there will be a 20-50 per cent decrease in you electricity bills.” The prices of both commodities have risen multiple times in the past year under directions from International Monetary Fund as part of a reform agenda it agreed upon with Pakistan in 2019 and which is set to continue with a $6bn rescue package. “We have decided that we will not raise prices of these two things until next budget,” Khan said. His announcement came as the price of Brent crude oil recently surpassed $100 a barrel in the global market. Pakistan’s economy has lately been under pressure due to a widening current account deficit and depleting foreign reserves. Talking about the cash handouts given to the people under the Ehsaas programme, the premier said that it had increased from Rs12,000 to Rs14,000. In addition, graduates would be given skills-based internships and paid Rs30,000, he added. He reiterated that the IT sector, which included companies and freelancers, had been exempted from paying taxes, adding that they would also not face any restrictions on foreign exchange. Further, IT startups would no longer have to pay capital gain tax, he promised. Dilating on industries, the premier said that anyone wishing to set up an industry in Pakistan or invest in the sector would not be “asked any questions”. He said that he would announce a complete package for this sector later. Moreover, overseas Pakistanis who invest in industries or carry out a joint venture will get a five-year tax holiday. Under the Kamyab Jawan programme, he said that the country’s youth and farmers would be given interest-free loans while low-income citizens would be given subsidised loans to build homes. “Loans worth Rs407bn will be disbursed during two years.” The prime minister expressed satisfaction at the fact that banks had been persuaded to give loans to low-income citizens, noting that so far they had approved Rs150bn in loans.