Last Updated: January 30, 2023, 08:25 IST
Pakistan is fearing that it may default on its debt obligations as its forex reserves continue to dwindle (Image: Reuters)
Shehbaz Sharif had said that the ruling alliance was ready to swallow the bitter pill of the IMF’s ‘stringent’ conditions to revive the loan programme
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.
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 sixteenth 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 at 11 am on Sunday.
After the rise, the price of petrol was set at Rs 249.80 per litre, high-speed diesel at Rs 262.80, kerosene oil at Rs 189.83, and light diesel oil at Rs 187 per litre.
Last week, Prime Minister Shehbaz Sharif had said that the ruling alliance led by his party was ready to swallow the bitter pill of the International Monetary Fund’s ”stringent” conditions to revive the loan programme and it has clearly conveyed intentions to complete the ninth review to the IMF.
Pakistan entered a USD 6 billion IMF programme during Imran Khan’s government in 2019, which was increased to USD 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 USD 1.18 billion.
The IMF team would 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.
Dar said that speculation was rife on social media regarding a Rs 50 increase in the prices of petrol and diesel. “Because of this, we have received reports of artificial shortages in the market.” “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.
Cash-strapped Pakistan’s currency depreciated to its lowest against the US dollar on Friday in the interbank 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.
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.
Former finance minister Asad Umar said that the public was already fed up with inflation as he termed the government’s move as “punishment” for the people.
Pakistan is facing the worst economic crisis as its reserves have dropped to a critical level of USD 3.7 billion and need urgent support to avoid default.
The IMF is the only forum that can save the country. But many people wonder about the future of the country without any long-term planning in sight to tackle similar economic situations.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
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