As a result, a big differential had piled up by the previous government, which must be reduced for fiscal space in the next budget. Senator Khurshid Ahmed said that the committee must be provided full record, about rate and increment, made in oil prices during last year.
The Minister said that only Rs 15 billion was kept for oil subsidy, but it had climbed to Rs 135 billion up to March, and might cross Rs 153 billion by the end of the year. "This differential must be passed on to consumers, in phases, given the overrun in budget that created financial constraints for the government," he said, adding that the prices of kerosene might not be increased just to benefit the poor, particularly of rural areas where it is used for cooking.
The subsidy given on oil prices, he said, was piled up by previous governments, including the caretakers during their four-month tenure for election expediency. "This is another factor contributing to financial constraints for the new government", he said without responding to a remark by a member as to why he was with the same team whom their government accused of figure fudging.
The Minister defended SBP Governor when asked in what capacity the central bank had granted R&D subsidy for textile sector when there was zero allocation in the budget. "The SBP governor cannot be blamed because she was following government instructions", Dar commented, fearing domestic borrowing may compound further.
"We will have nothing for development fund in the coming budget if oil differential is not gradually passed on to consumers" he told the committee.
SBP Governor Dr Shamshad Akhtar briefed the committee on the draft Corporate Rehabilitation Act (Bankruptcy Law). The committee members were of the view that Pakistani society had been converted into a debt society because of easy credit.
The chairman of the committee, Senator Ahmed Ali, said that the committee would give its views based on public opinion. The committee said the Draft Act must be circulated for public opinion among all stakeholders, and mainly the Chambers of Commerce and Industry so that the draft could be made more effective.
Some members of the committee were of the view that the draft reflected the contents of 'Chapter - 11 of the US bankruptcy law' without taking into account the differing nature of conditions obtaining in Pakistan and the United States.
The members also emphasised the need for mediation rather than liquidation. "Our focus should be on reviving those companies and entities which land into temporary difficulties due to bad conditions." The committee included chairman Ahmed Ali, Gulzar Ahmad Khan, Ms Pari Gul, Muhammad Anwar Bhinder, Asif Jatoi, Muhammad Amin Dadabhoy, Haroon Khan, Nisar Ahmad Memon, Khurshid Ahmed, Dr Khalid Mahmood Soomro, Dr Safdar Ali Abbasi.