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HYDERABAD: Federal Minister for Petroleum and Natural Resources Syed Naveed Qamar said on Saturday that the government had to increase prices of petroleum products because of a surge in international prices.
Talking to journalists after the ground-breaking ceremony of a school at Bulri Shah Karim in Tando Mohammad Khan district, he said in the international markets the price of crude had jumped from $80-$82 to $94-$95 a barrel due to economic growth in the West. And because up to 85 per cent of the crude is imported, the government had to enhance the local prices of petroleum products.
Mr Qamar said the existing fiscal position in the country did not allow the government to reduce the taxes or offer subsidies to people. However, the authorities were trying to mitigate the effects of the taxes.
He said the government realised fully that the consumers were being burdened.
The minister said the government did not want to resort to deficit financing, as had been done by the previous government, because this would fuel inflation further. “So, we all have to take this bitter pill,” he remarked.
Mr Qamar said the government had fixed the profit margins of the oil companies in an effort to stop them from making windfall profits out of price fluctuations.
However, he said, since the purchase prices of the commodities had increased there were bound to be effects on their sale prices.Turning to the gas shortage that had caused a steep increase in the price of urea fertiliser, the minister said the gap between demand and supply was widening.
He said the closure of gas fields for maintenance was not a new phenomenon but this year the fields had been closed a little early.
Mr Qamar said all industrial units needed to be facilitated because these are engaged in employment generation. And all the sectors should be treated equally because squeezing one while protecting others would hardly be justified.
The gas shortage did not justify an exorbitant increase in urea price. However, a marginal increase could be justified.
About the next year’s budgetary allocations for development projects, he said resource mobilisation needed to be improved. That’s why the reformed general sales tax had assumed importance.
“After all, you have to shift the burden. Either revenue generation (or taxes) should be increased or expenditures cut,” he said.
In the next budget, revenue generation would have to be improved coupled with better resource mobilisation in order to “take the public sector development programme to a somewhat reasonable level”, the minister said.
Earlier, speaking at the ground-breaking ceremony of the school, he said opening of a good educational institution in his constituency was like a dream come true for him.
He added that inaugurating a building was a non-issue. “Rather, it is how these new buildings are managed and run that matters.”
The school is being established by British Petroleum in collaboration with The Citizens Foundation to provide quality education to population of the rural area.
Later, addressing a public meeting in Tando Mohammad Khan, the minister announced that Rs500 million would be allocated for the district’s beautification and Rs100 billion for rehabilitation of the area’s sewage lines.
