Islamabad: Cash-strapped Pakistan’s government on Sunday raised prices of petrol and diesel by Rs 35 each, giving another jolt to the country’s inflation-stricken people. The decision comes days before an International Monetary Fund mission will visit Pakistan later this month to discuss the stalled ninth review of the country’s current funding programme. Last week, the Pakistani rupee lost close to 12% of its value after the removal of price caps that were imposed by the government but which were opposed by the IMF.
Finance minister Ishaq Dar made the announcement in a televised address on Sunday morning, spoiling people’s weekly holiday as prices in the past had been adjusted on a fortnightly basis from the first to 16th of every month.
“We have decided to increase the price of petrol and diesel by Rs 35 each. The price of kerosene oil and light diesel oil has been increased by Rs 18 each,” Dar said, adding that the new prices would come into effect on Sunday. After the rise, the price of petrol was set at Rs 249.8 per litre, high-speed diesel at Rs 262.8, kerosene oil at Rs 189.8, and light diesel oil at Rs 187 per litre.
Last week, PM Shehbaz Sharif had said that the ruling alliance led by his party was ready to swallow the bitter pill of the IMF’s “stringent” conditions to revive the loan programme and it has clearly conveyed intentions to complete the ninth review to the IMF. A successful IMF visit is critical for Pakistan, which is facing an increasingly acute balance of payments crisis and is desperate to secure external financing, with less than three weeks' worth of import cover in its foreign exchange reserves.
The Pakistani rupee saw devaluation last week and now we are seeing an 11% increase in the prices of petroleum products in the international market,” Dar said. Pakistan’s currency depreciated to its lowest against the US dollar on Friday in the inter bank and open market and closed at Rs 262.6. Dar said the government had not increased the price of petrol since October last year until January 29 and also decreased the prices of diesel and kerosene oil. Ahead of the hike in the prices, long queues of motorists were seen at the filling stations. The rush was fuelled by reports of shortage and massive increase in the prices.