By SPA
Islamabad : Increase in prices of petroleum products, introduced two days back, was inevitable in view of unprecedented hike in prices at the international level, Finance Minister Dr Salman Shah said.
Adjustment in petroleum products prices has been made in consultation with political parties having majority in the parliament, and this will facilitate the next government, he told the reporters.
However, Shah said, more adjustments will have to be made in the prices during the coming months to minimise the impact of high oil rates in the international market on balance of payment.
The finance minister that on average prices of electricity and petroleum products have been increased by a single digit i.e 9 percent, to ensure that its inflationary impact is minimum, which will be around 1 to 1.50 percent.
About undue delay in raising the prices, he said it was not delayed to save the previous government from criticism, and the decision in this regard was taken in view of various economic factors, adding that in India too the prices of petroleum products have been revised upwards after about 20 months.
Shah said the balance of payment was under pressure due to the higher oil prices, and the step will mitigate its impact, he added.
When asked as to how much increase will have to be made in oil prices to offset the impact of its high rates in the international market, he said, I cannot say as to how much raise will be required, but doing it in one go will not be advisable .
Underling the need for efficient use of energy, its conservation and management, he said this can help in 15 to 20 percent saving in both electricity and petroleum products. Such a strategy will not only help minimise the impact of the increase in energy prices, it will also increase our competitiveness. In the modern era, energy efficiency and management are of vital importance, and only energy-efficient nations are excelling in the competitive world .
He said a plan has been evolved to introduce a system under which electricity rates will be higher during peak hours and less during off-peak timings.
The minister said Pakistan s economy is doing well, with the annual economic growth rate recorded at 7 to 8 percent.
If this trend continues and the exchange rate remains stable, the country s economy will double in next about five years.
The minister said the fiscal deficit is also under control, which will not be much higher than the 4 percent target, probably around 4.50 to 5 percent, while in India it is 7 percent.
Under the economic strategy, the fiscal deficit will reduce to 3 percent during the next 10 years, he added.