Pakistan govt hikes petrol, diesel prices by ₹35 each

Finance Minister Ishaq Dar made the announcement on Sunday morning.

“We have decided to increase the price of petrol and diesel by ₹35 each. The price of kerosene oil and light diesel oil has been increased by ₹18 each,” Dar said, adding that the new prices would come into effect at 11 am on Sunday.

After the hike, petrol price now stands at ₹249.80 per litre, while high-speed diesel at ₹262.80, kerosene oil at ₹189.83, and light diesel oil at ₹187 per litre.

Prime Minister Shehbaz Sharif last week said that the party was ready to take International Monetary Fund’s “stringent” conditions to revive the loan programme and it has conveyed IMF that it intends to complete the ninth review to the IMF.

Pakistan entered a $6 billion IMF programme during Imran Khan’s government in 2019, which was increased to $7 billion last year. The programme’s ninth review is currently pending with talks being held between IMF officials and the government for the release of $1.18 billion.

The IMF team will be in Islamabad from January 31 to February 9 to hold talks with the officials over the implementation of its conditions attached with the assistance package.

“Because of this, we have received reports of artificial shortages in the market,” said Dar.

“The Pakistani rupee saw devaluation last week and now we are seeing an 11 per cent increase in the prices of petroleum products in the international market,” he said.

Pakistan’s currency depreciated to its lowest against the US dollar on Friday in the interbank and open market and closed at ₹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.

Fahad Raud, head of equities at Ismail Iqbal Securities, commenting on the price hike said it was “in line with expectations” as he warned of more increase.

“This is only a partial increase as it does not incorporate recent exchange rate depreciation. More increase to come in mid-February,” he tweeted.

Former prime minister Imran Khan criticised the price hike, saying that the “total mismanagement” of the economy by the “imported government” has “crushed the masses and salaried class”.

“Electricity and gas price hike and 35% unprecedented inflation expected with Rs200bn mini-budget,” tweeted Khan, the chairman of the Pakistan Tehreek-e-Insaaf Party.

Pakistan is facing the worst economic crisis as its reserves have dropped to a critical level of $3.7 billion and need urgent support to avoid default.