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Pakistan Govt mulling importing Russian oil: Dar

ISLAMABAD: Finance Minister Ishaq Dar said Wednesday that Pakistan is actively considering the import of oil from Russia, and if India is getting oil, Pakistan can also get it and this was conveyed to the concerned quarters in Washington.

He said that he would fulfil the commitments made by his predecessors with the International Monetary Fund (IMF).

Talking to the media at the conclusion of the All Pakistan Chartered Accountants Conference (APCAC) 2022 on Sustainability, Technology and Transformation, the finance minister ishaq dar said that Pakistan would get oil from Russia if it is comparable to the price at which India is getting the oil or is cheaper than that. The US has not shown any reservations when we conveyed to them about buying oil from Russia.

“Dar also said, We have conveyed our intentions to the US authorities regarding Islamabad’s active consideration to procure oil from Russia at cheaper rates during my recent visit to Washington and they did not raise any reservations. We will take a decision in the larger interest of the country,”

Dar stated. In reply to a question about the exchange rate, he said that the exchange rate should fall below Rs200 against the US dollar in accordance with the real effective exchange rate (REER). The exchange rate, he said, will be brought down to its real value and soon he will meet with bankers to convey that the speculators will not be allowed to play tricks on the currency.

Dar said that inflation in the country was the outcome of the policies of four years and not of a few months and the government is trying its best to tame inflation. The finance minister said that the people have been provided relief by reducing the prices of petroleum products and we will provide them more relief as soon as possible.

Pakistan’s case: US ready to allow Russian oil trade

To another question whether Pakistan would request the IMF for relaxing conditions on petroleum levy and electricity prices, Dar said that Pakistan would honour all its commitments signed by the PTI government or his predecessor as being a sovereign state the country could not breach its signed commitments as import of oil from russia .

To a question, he stated that the rail upgradation Mainline-1 should have been constructed with the estimated cost of $6 billion but now its cost doubled to the tune of $12 billion. In rupee terms, the cost of ML-1 increased four times from Rs600 billion to Rs2400 billion, he said and raised the question of who was responsible for such a mammoth loss.

He said that CPEC is a deal of $46 billion, out of which, $36 billion was utilised for energy projects. He said that the construction of ML-1 was going to cost $6 billion and the remaining $3 billion were supposed to be utilised for the infrastructure project. However, the ML-1 could not be constructed so its cost now doubled in dollar terms and gone up four times in rupee terms. He said that Pakistan complied with all points of the action plan of the FATF and it was hoped that Islamabad would graduate from the grey list.

He said that they did not want to pre-empt the announcement of the FATF but hoped for a positive outcome. He said that the Islamic Sukuk bond was being launched with asset-back guarantees while other international bonds were launched with floating guarantees. He said that if the country wanted to move towards Sharia-compliant instrument then asset-backed guarantees for Sukuk bonds will have to be provided, he said.

He added that the Pakistan Tehreek-e-Insaf (PTI) chairman was making irresponsible statements.

Earlier, addressing as chief guest at the APCAC, Finance Minister Dar said that in the current fiscal year, $32-34 billion would be needed including with $22 billion multilateral liabilities and $12-14 billion on account of trade gap. He was optimistic that the country would be able to do it. “We will arrange everything and Pakistan would not default and no one should have worry about it.

We have been able to control damage and now the macroeconomic indicators would be put on the right direction,” he said, adding that there is no need to be worried as nothing would happen. He said he would fix the economy. He sought advice from the conference with regard to the economy. He said a committee was formed to assess the losses of Pakistan, due to floods with the UNDP, EU, ADB, and the WB, and the Pakistani government was assisting it. He said that the preliminary numbers shared during a meeting in Washington put the $32.4 billion losses and minimum need is $16.2 billion.

He said that France would host a ‘Donors Conference’ next month, whereby, it is hoped that the international donors would generously contribute towards making up losses incurred in the aftermath of severe floods.

He assured that Pakistan managed its external financing requirements of $32 to $34 billion and Islamabad would not default in paying its foreign debt obligations.

The finance minister said that there are speculations that Pakistan is going to Paris Club for rescheduling of its loans and stated that he was against it and convinced the prime minister as well in this regard. He said that another speculation was that $1 billion of Pakistan being matured in December 2022 and the country would be seeking an extension in date.

The finance minister said the country would do its best to meet its obligations and the third speculation that he would renegotiate the IMF programme was also baseless. He said that he personally believes that sovereign commitments should be honoured whether these are made by any political party. Dar said that the debt-to-GDP ratio of the US, Japan, and some other countries is much higher compared to that of Pakistan but interests of the country on this account were being damaged by making statements at global forum.

He also recounted that for the first time Pakistan completed the IMF program in 2016 by Pakistan Muslim League-N (PML-N) government after coming to power. Subsequent to February 2013 elections, he was assigned the responsibility to fix the macroeconomic unstable economy of the country with double digit inflation, high interest rate, shaking rupee, and very low foreign exchange reserves besides average GDP growth of less than two percent. He said that he took the responsibility and presented the budget within five days and within a month, the country signed the IMF agreement.

He said that when there is such a state of the economy and one has to still decide whether he has to “commit suicide” or go to the IMF to fix the economy, this is too slow and unfair to the economy.

He said that the whole world was acknowledging Pakistan’s economic progress and the country’s rating went up after three years of the PML-N government. By 2016-17, he said inflation was four percent; the currency was stable, foreign exchange reserves of $24 billion were with the State Bank of Pakistan (SBP), and growth was at around six percent. Dar added that there was a projection that as a nuclear power, Pakistan would be sitting at par with other 19 members of G20.

He said that this was Pakistan’s destiny but consequent to the drama like Panama Papers, all that was shifted and Pakistan is recently-predicted 54th economy by 2034. He said that he is not criticising anyone but flagging the fact. The finance minister said that the new government of Pakistan Democratic Movement (PDM) after a successful constitutional vote of no confidence has to take tough decisions for the sake of the country because there were very serious challenges. First thing was to be rescued from defaulting which has been done but at a very high political cost and now efforts are being made to fix the macroeconomic indicators.

Addressing the conference, Securities and Exchange Commission of Pakistan (SECP) Chairman Aamir Khan stated that there are three integral challenges that hinder transformation and sustainable growth of organisations: First, is the innate aversion to risk-taking. The leaders of companies that failed to embrace risk and innovation have faded away, rather unceremoniously.