Pakistan raises prices of petrol, diesel by Rs 35 amid economic crisis
The country is facing the threat of debt default as the International Monetary Fund continues to delay a $6 billion bailout secured in 2019.
The Pakistan government on Sunday announced an increase of Rs 35 (local currency) in the prices of petrol and diesel amid an economic crisis, reported Dawn.
With the hike, petrol will cost (in local currency) Rs 249.80 per litre, high speed diesel Rs 262.80 per litre, kerosene oil Rs 189.83 per litre and light diesel oil Rs 187 per litre.
“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,” Finance Minister Ishaq Dar said in a televised address.
On January 19, Pakistan’s currency had hit a record low of Rs 255.43 against the US dollar. The drop in currency value by 9.6% had been the largest single-day decline in both absolute and percentage terms since 1999.
This came amid the threat of debt default as the International Monetary Fund continues to delay a $6 billion (INR 48,970 crore) bailout, which was secured in 2019 under an Extended Fund Facility. The bailout was topped up with another $1 billion (INR 8,164 crore) in 2022. The International Monetary Fund is planning to visit Pakistan to discuss the stalled funding programme.
Last week, Prime Minister Shehbaz Sharif had said that the ruling alliance led by his party, the Pakistan Muslim League, was ready to swallow the bitter pill of the International Monetary Fund’s stringent conditions to revive the loan programme, reported PTI.
On Sunday, Dar said the rpcies have been hiked on the recoomendation of the oil and gas regulatory authority “who said there were reports of artificial shortages and hoarding of fuel in anticipation of price rises”.
Meanwhile, Opposition party Pakistan Tehreek-e-Insaf chairperson and former Prime Minister Imran Khan criticised the petrol price hike, saying that the total mismanagement of the economy by the “imported government crushed the masses and salaried class”.
He added: “Electricity and gas price hike and 35% unprecedented inflation expected with Rs200bn mini-budget.”
Pakistan has been seeking monetary assistance from countries like China, Saudi Arabia, and the United Arab Emirates.
On January 10, Saudi Arabia had said it would consider increasing the kingdom’s assistance and investments in Pakistan to $10 billion (Rs 81,763 crore) from $1 billion (Rs 8,176 crore).
Earlier this month, Pakistan had announced a series of measures, including closing all malls and markets by 8.30 pm, in an attempt to conserve energy. The National Energy Conservation Plan was introduced by the Pakistani government to save the country about Rs 6,200 crore (2,273 crore Indian rupees).
Pakistan’s looming economic struggle was exacerbated by the devastating floods that displaced nearly 3.3 crore people of its 23 crore population, and destroyed crops over large tracts of land.