Jamaat-e-Islami Proposes Measures to Reduce Petrol Price Pressure
Islamabad: Jamaat-e-Islami (JI) has presented a package of 23 economic measures aimed at creating fiscal space of up to Rs. 3.102 trillion annually without increasing the petroleum levy on consumers.
The proposals focus on reducing government expenditure, restructuring the energy sector, improving tax collection and cutting unnecessary financial burdens.
JI Seeks Changes to Petroleum Pricing
The party has proposed reforms to the import parity pricing mechanism for locally produced petroleum products.
According to JI estimates, the measure could result in annual savings of up to Rs. 120 billion.
The party has also suggested importing crude oil instead of finished petroleum products and increasing domestic refining capacity. It estimates that these steps could generate additional savings of around Rs. 185 billion per year.
JI has further called for an independent audit of refinery upgrade fees and other charges, arguing that consumers should not bear additional costs related to refinery modernization.
Government Spending Cuts Proposed
JI has recommended reducing federal government expenditure by eliminating unnecessary spending and shifting certain responsibilities to provincial governments.
The party estimates that these measures could create annual savings of up to Rs. 949 billion.
It has also proposed reducing the federal Public Sector Development Programme (PSDP) from Rs. 1 trillion to Rs. 800 billion.
The party wants overlapping federal and provincial development projects to be removed to prevent duplication of spending.
Monetary and Debt-Related Reforms
For reducing financial costs, JI has proposed increasing the State Bank of Pakistan’s cash reserve requirement to 15%.
The party estimates that this measure could result in annual savings of approximately Rs. 448 billion.
It has also recommended reducing the policy rate from 11.5% to 9%, claiming that the move could lower interest-related government expenditure by around Rs. 100 billion annually.
Reforms Proposed for Power Sector
JI has called for an audit of the remaining agreements with Independent Power Producers (IPPs).
The party has proposed renegotiating costly contractual terms where possible and estimates that reforms in this area could generate annual savings of up to Rs. 400 billion.
According to JI, reducing unnecessary costs in the electricity sector could provide additional fiscal space and ease pressure on consumers.
JI Calls for Closing Tax Gap
The party has also focused on improving tax collection rather than increasing the burden on existing taxpayers.
JI estimates that closing the Federal Board of Revenue’s (FBR) tax gap could generate up to Rs. 3.4 trillion in additional revenue.
It has also proposed withdrawing most tax exemptions, while retaining exemptions related to essential areas such as food, health, education and defense.
According to the party, this could increase annual government revenue by approximately Rs. 250 billion to Rs. 350 billion.
World Bank Reforms Also Highlighted
JI has referred to reforms identified by the World Bank that it says could generate federal savings of up to Rs. 1.1 trillion annually.
The party has also called for reductions in non-development expenditure and spending on luxury items as part of a broader effort to improve fiscal management.
Focus on Avoiding Higher Petroleum Levy
The central point of JI’s proposal is that the government should create additional fiscal space through expenditure cuts, energy-sector reforms and stronger tax collection.
The party argues that these measures could help the government manage its finances without imposing an additional petroleum levy on consumers, potentially reducing pressure on fuel prices.
