In a meeting held on Wednesday, the Economic Coordination Committee (ECC) of the cabinet gave the green light to increase margins for petroleum dealers and oil marketing companies (OMCs) on petrol and diesel sales. Dealers will see a per-litre hike of Rs1.64, while OMCs will get a boost of Rs1.87 per litre. These increases will be implemented in four fortnightly instalments starting from September 15. As a result, consumers will bear an additional burden of Rs3.51 per litre on both petrol and high-speed diesel (HSD).
The ECC also approved supplementary grants totaling Rs40 billion for the armed forces. This allocation will cover international security allowances, subsidies, and miscellaneous expenditures during the ongoing fiscal year. The Pakistan Army will receive Rs33 billion, the Navy will get Rs7 billion, and the Air Force will receive Rs50 million. However, the funds will be disbursed on a case-by-case basis.
While addressing other matters, the ECC did not immediately approve a bailout package for Pakistan International Airlines (PIA). Additionally, they did not allow the suspension of tax and service charges payable to the Civil Aviation Authority and the Federal Board of Revenue for PIA without a sustainable restructuring plan in place.
The committee expressed concern about PIA's financial situation, highlighting that its total debt and liabilities had exceeded Rs743 billion in December of the previous year, surpassing the value of its assets by five times. Without significant changes, PIA's debt and liabilities could potentially reach Rs2 trillion, with annual losses reaching Rs260 billion by 2030.
To address PIA's financial challenges, the ECC decided to establish a separate committee to assess and develop a restructuring plan for the airline. The Ministry of Aviation submitted a summary regarding financial support for PIA and its restructuring, with the Secretary of Aviation providing detailed insights into the airline's financial burdens and liabilities. The finance division and the State Bank of Pakistan will provide support once a concrete restructuring plan is finalized.
These decisions come as the government grapples with economic challenges and seeks to find sustainable solutions for key sectors, including the aviation industry and energy markets.
