Govt increases petrol price by Rs30 per litre

ISLAMABAD (Dunya News) – In another jolt to the inflation-hit masses, the government has decided to increase petrol and diesel prices by Rs30 per liter from June 3.

This was announced by Finance Minister Miftah Ismail during a press conference today (Thursday).

After the increase in prices, new petrol price will be Rs209.86 per liter while diesel will be sold at Rs204.15 per liter.

Miftah Ismail said that the decision was taken due to the rising prices of petroleum products in the international market. He said that despite the massive increase, the government was still bearing losses.

The minister said, in addition, the government was bearing loss of around Rs91 billion due to provision of subsidy on petroleum products as per the rates of May 31st.

However, the prices of petroleum products increased further since May 31st in international market that could mount the losses to around Rs130 billion and put further burden on national exchequer.

“We understand that this would bring inflation but I want to inform people that it was inevitable as I have to make agreement with IMF.” He said adding the decisions taken by former finance minister Shaukat Tarin in striking deal with IMF and later violating these had tied hands of the incumbent government.

The minister announced hike of Rs30 per liter petrol which would now be sold at 209.86 instead of Rs. Rs179.86 from June 3.

Likewise, the price of diesel has been enhanced by Rs.30 from Rs.174.15 to Rs.204.15; light diesel oil from Rs.148.31 to Rs.178.30, 30 percent increase whereas the prices of kerosene oil has been increased from Rs.155.56 to Rs.181.94, an increase Rs.26.38 per liter.

The minister said that despite all this prices-hike, the government was still bearing loss of Rs.9 at per liter petrol, Rs23 on high speed diesel and Rs.8 at light diesel oil. However, there was no loss on kerosene oil.

The minister said that the hike in petrol prices would definitely increase inflation, however the government had taken measures to reduce negative effects of inflation on poor people buy providing relief package.

In addition, the government would provide sugar at Rs70 and per kilogram; flour at Rs40 per kg throughout the year. This, he said, would help provide relief to the poor people. He said the government was already providing subsidy on ghee, rice and pulses.

Govt, IMF talks

It is pertinent to mention here that the International Monetary Fund (IMF) had urged Pakistan to end subsidies on electricity and petroleum products to revive the program.

According to a statement issued by the IMF, the mission led by Nathan Porter, held virtual and direct talks with Pakistani officials on policies to ensure economic stability and sustainable growth in Pakistan from May 18 to May 25.

The statement stated that the mission held constructive talks with Pakistani officials to reach an agreement on policies and reforms to conclude the seventh review of the pending reform program, which is supported by the IMF Extended Fund Facility arrangements.

The IMF said that significant improvements had been made during the mission, including high inflation and fiscal and current account deficits, while adequate protection was being ensured to end the sharp decline. In this regard, the implementation of the policy rate hike from May 23 was a welcome step.

It was informed that the promises made in the previous review in the financial sector have not been fulfilled and the authorities announced partial subsidies for fuel and energy in February, statement sated.

"The team emphasized the urgency of concrete policy actions, including in the context of removing fuel and energy subsidies and the FY2023 budget, to achieve program objectives." IMF added.

“The IMF team looks forward to continuing its dialogue and close engagement with Pakistan’s government on policies to ensure macroeconomic stability for the benefit all of Pakistan’s citizens.”