Caretaker Finance Minister Dr Shamshad Akhtar revealed how and when the petrol price in Pakistan will be reduced.
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Finance Minister Urges Fiscal Responsibility
Dr Shamshad Akhtar was giving a briefing on the overall economic situation of the country to the Senate Standing Committee on Finance on Thursday.
Caretaker Finance Minister Dr Shamshad Akhtar said that expenditure in excess of income is the real cause of Pakistan’s economic problems and that the country cannot afford Rs 1,300 billion in tax exemptions.
She also said that there is a need to impose capital gains tax on immovable assets.
The minister said that the exchange rate has stabilized, the dollar has come down to Rs 288, remittances have increased, and the ban on imports has been lifted.
During a recent address, Dr. Shamshad Akhtar, the caretaker finance minister of Pakistan, made several significant announcements about the country’s economic policies and challenges. According to her, inflation has seen a decrease from 38% to 25%, although the government’s goal is to further reduce it to 22%.
Economic Progress and Challenges
Dr. Shamshad Akhtar emphasized that Pakistan is currently providing substantial tax exemptions amounting to Rs1,300 billion to groups that should be subjected to wealth taxation. Additionally, the government is allocating Rs1,000 billion in subsidies for electricity and gas. Dr. Akhtar highlighted that only countries with foreign exchange reserves exceeding $400 billion can afford such subsidies.
In a move to regulate the financial sector, the caretaker finance minister declared the closure of all unlicensed money exchange companies. Furthermore, she revealed that five banks have been granted digital banking authority starting from September, indicating a push towards modernizing the banking system.
Addressing concerns about the currency market, Dr. Akhtar assured that the government is refraining from interfering in the market dynamics. Instead, stringent actions are being taken against smugglers and hoarders to maintain market stability.
Debt Crisis, IMF Dependency, and Global Oil Price Dynamics
Dr. Akhtar expressed deep concern regarding the country’s escalating debts, labeling the situation as highly perilous. She stressed the critical importance of implementing the International Monetary Fund (IMF) program, stating that without its implementation, external financial resources would not be accessible to Pakistan.
The finance minister of Pakistan emphasized the nation’s vulnerability to international oil price fluctuations, stating that any reduction in Pakistan’s petrol prices would be contingent upon a corresponding decrease in the global oil market. This statement underscores Pakistan’s heavy reliance on global market trends and exposes the intricate web of interconnected factors that dictate the country’s economic policies.
In a globalized world, where economies are intertwined and influenced by international events, Pakistan finds itself at the mercy of shifts in the worldwide oil market. The prices of petrol and other fuel commodities are directly impacted by geopolitical tensions, production levels set by major oil-producing nations, and global demand-supply dynamics. As a result, the Pakistani government’s ability to control domestic petrol prices is constrained by these external forces.
Path to Economic Stability
This dependence on international oil prices highlights the challenges faced by developing economies like Pakistan. Fluctuations in oil prices can have a cascading effect on various sectors of the economy. High oil prices often lead to increased costs of production and transportation, which in turn can raise the prices of goods and services across the board. This situation puts pressure on consumers, businesses, and the overall economic stability of the country.
Furthermore, the finance minister’s statement also sheds light on the importance of energy security and diversification of energy sources for countries like Pakistan. Developing renewable energy alternatives, investing in domestic energy production, and exploring sustainable practices are crucial steps that can help mitigate the impact of global oil price fluctuations. By reducing reliance on imported oil and fostering a resilient energy sector, Pakistan can enhance its economic stability and reduce vulnerability to international market volatilities.
In essence, the finance minister’s remark underscores the need for proactive economic strategies and policies that can buffer Pakistan from the uncertainties of the global oil market, ensuring a more stable and self-reliant energy future for the nation.