Steps to meet the IMF conditions include increasing fuel and energy prices. (Representational)
Cash-strapped Pakistan announced a 35 rupees increase in the prices of petrol and diesel, days after its currency depreciated to its lowest against the US dollar in the interbank and open market.
Here are 10 points about the diesel and petrol price hike in Pak:
- Petrol and diesel prices in Pakistan have increased by 35 rupees, while the prices of kerosene oil and light diesel oil have been increased by 18 rupees, Pakistan Finance Minister Ishaq Dar announced in a televised address, 10 minutes before the increased prices came into effect.
- "Government announced new prices of Petroleum Products with effect from 11.00 hrs, 29 Jan, 2023. High Speed Diesel-262.80 rupees per litre MS Petrol --249.80 rupees per litre Kerosene Oil -189.83 rupees per litre Light Diesel Oil - 187 per litre rupees," Pakistan's Ministry of Finance tweeted.
- Finance Minister Ishaq Dar said that despite international prices and rupee devaluation, "on directions of Prime Minister Shehbaz Sharif, we have decided to increase the minimum price of these four products," Dawn newspaper reported.
- Ishaq Dar added that in the last four months, the price of petrol was not increased. "In fact, the prices of diesel and kerosene oil were decreased," Dawn quoted him as saying.
- Explaining the reason behind the increase, Mr Dar said that it was done based on the recommendation of the oil and gas regulatory authority. "They said there were reports of artificial shortages and hoarding of fuel in anticipation of price rises - hence this price rise is being done immediately to combat this."
- The Pakistani rupee's value has fallen by 34 rupees against the US dollar since Thursday, the largest depreciation in both absolute and percentage terms since the new exchange rate system was introduced in 1999.
- The Pakistani rupee also depreciated sharply after the government removed an unofficial cap on the USD-PKR exchange rate to revive the stalled International Monetary Fund (IMF) loan programme.
- The cash-strapped nation needs to complete the ninth review of a $7 billion IMF programme that would not only lead to a disbursement of $1.2 billion but also unlock inflows from friendly countries and other multilateral lenders.
- Prime Minister Shehbaz Sharif has said his coalition government is determined to complete the bailout plan even though it will have to pay a political cost for the decision just months away from national elections, Bloomberg reported.
- Steps to meet the IMF conditions include increasing fuel and energy prices and raising more taxes, which together with the currency slump of about 13 per cent in the past two days may further stoke inflation.
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