LAHORE, July 16: The government is considering a proposal to link domestic wheat prices to regional prices from the next Rabi season to curb smuggling.
A meeting of the federal cabinet, presided over by Prime Minister Yousuf Raza Gilani, on Wednesday approved a project to generate power from Thar coal to overcome electricity shortages, and authorised Ogra to fix gas prices in future. A project to run 8,000 CNG buses in nine cities was also approved.
“The cabinet has discussed a proposal to control smuggling of wheat through a price mechanism,” Information Minister Sherry Rehman told a briefing after the meeting. But she did not say whether the cabinet had approved the proposal or not.
“Wheat prices in Pakistan are still very low, compared to its global and regional prices. It is because of this price difference that the grain is being smuggled to Afghanistan and other countries,” she said.
“We have decided to announce the official procurement price for the next wheat crop in September after consulting the provinces. The wheat procurement will continue during the next season till we achieve surplus and ensure food security. Wheat export will not be allowed at all,” she said.
The cabinet discussed the current wheat availability situation, needs of the four provinces and the rising price trend in different parts of the country.
It decided that a committee, headed by the federal finance minister and comprising representatives of the provinces, would take measures to ensure availability of wheat across the country and devise a mechanism to ensure uniform prices.
The committee, as proposed in the ECC meeting on Tuesday, will also devise a formula to distribute 2.5 million tons of imported wheat among the provinces.
Ms Rehman blamed the last government for the crisis and said the shortages should not be blamed on the PPP government.
“We want to make Pakistan a wheat- and food-secure country and will continue to monitor the availability of essential food items on a regular basis. The provinces are on board on this issue. We will not let anyone create another wheat crisis,” she maintained.
In reply a question about the rising food and oil prices, the minister said the government was still giving a subsidy of Rs1 billion a day (in spite of increasing oil and power prices). “Irresponsible pricing can also lead to problems like higher budgetary deficit. We have to strike a balance. It is especially critical because the escalating global oil prices are creating problems for us.”
The Planning Commission’s vice-chairman gave a presentation on consumer pricing and control mechanism. Ms Rehman said the meeting had decided to form a cell to be represented by the four provinces. It will look into the issue and decide if a new body for that is needed.
The cabinet also constituted a secretaries’ committee, headed by the federal finance minister, to monitor movement and availability of commodities and their prices on a daily basis.
State Bank Governor Dr Shamshad Akhtar gave a presentation on inflation and said the country was importing a major percentage of inflation because of the rising global oil and food prices.
“Global oil and food prices have gone up by 50 to 100 per cent and we being a net oil and food importer cannot escape its effects,” she said.
The SBP governor stressed the need for reducing budgetary deficit and imposing fiscal discipline. She urged the government to reduce dependence on borrowings from the central bank to bridge the fiscal deficit because it meant printing new currency and higher inflation.
AFGHAN ALLEGATIONS: The information minister said the cabinet had rejected Afghanistan’s allegations that Pakistan was spawning and supporting terrorism.
“The prime minister told the meeting that Pakistan wants peace in the region and good relations with its neighbours. But negatives statements and posturing (given by Afghanistan’s leadership) do not serve peace in the region,” she said.
The meeting approved a project to generate 20,000MW of electricity from Thar coal by 2030 and 6,000MW over the next five to six years.
Ms Rehman said that although Ogra had been authorised to fix gas prices in future, the government would protect the consumers of lowest slab from any hike. She said that a project had been approved to run 8,000 CNG buses in nine cities, including Karachi, Hyderabad, Lahore, Gujranwala, Faisalabad, Multan, Islamabad and Peshawar.
US NON-MILITARY AID: Ms Rehman said that a bill had been moved in the US Senate to give Pakistan $7.5 billion in non-military aid for education, health and development. She said the aid would provide Pakistan a much needed fiscal space.
In reply to a question about the ongoing insurgency in tribal areas, she said that no one would be allowed to challenge the government’s writ.
“Pakistan is fighting its own war, for its own survival. Our leader Benazir Bhutto gave her life for this. We shall confront the issue head-on,” she said, adding that the government would not negotiate with terrorists.
About the judges’ issue, Ms Rehman said the PPP would resolve the matter constitutionally. She said the constitutional package prepared by the PPP was with its allies and partners in the coalition.
“We will not take any action on it unless we receive a structured response on the package from our coalition partners.”
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