A high level meeting held here under President Pervez Musharraf has accorded approval to raise prices of petroleum products besides reviewing budget targets for the current fiscal year 2007-8.

Besides care taker Prime Minister Muhammadmian Soomro, care taker finance minister Suleman Shah, care taker ministers for petroleum, food and agriculture, commerce, economic division, deputy chairman planning commission, chairman FBR and other senior officers attended the meeting at presidential camp office.

Suleman Shah and economic team of the government briefed the president on economic performance for the first six months of current fiscal year and told that country’s economy had to sustain enormous loss in the wake of assassination of Benazir Bhutto and uncertain political situation. They stressed that prices of petroleum products and electricity would have to be increased as the prices in international market had risen to new heights.

They noted subsidy was still being allowed to people while NEPRA had made recommendations for enhancement in the cost of electricity by all DISCO as Wapda was also running in deficit. A loss to the tune of Rs 100 to 150 billion was caused to economy during the violence following the killing of Benazir Bhutto. Achieving the budget target looks to be very difficult due to these reasons, they told.

Sources told some key decisions were approved in the meeting in view of prevailing situation. The most important decision was to scale down budget target from 7.5 percent to 6.5 or 7 percent.

The president was told tax collection target had been set at 10.25 trillion but its attainment looked to be an uphill task. It will have to be reviewed.

President said any decision in this respect be taken keeping in view the future scenario and endeavors be made to achieve the target. If it is not met then CBR can review it, he stressed.

President was told fiscal deficit target was fixed at 4 percent for the current fiscal year but it has reached the mark of 6.5 percent. Therefore, its target has to be reviewed, he added.

President directed the difficulties of small consumers be kept in view while raising the prices of petroleum products and cost of electricity. More burden be not shifted to them. Prices be increased in such a way that one hand inflation remains contained and one part of subsidy being allowed by the government is kept in tact.

Suleman Shah told the meeting subsidy over 43 billion rupees has been given to people so far. If it is allowed to continue then our foreign exchange will start depleting, he warned. Therefore, it was decided the burden be gradually shifted to consumers.

President cautioned the miscreants wanted to derail the country’s economy. "But we will not allow them to do so and will deal with them sternly", he added.

On flour crisis he said government had taken steps on emergent basis, therefore, situation has started improving.

President also directed that continuity of economic policies and implementation of reform agenda be ensured.

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