Rs17.50 per litre spike - all-time high petrol prices put a strain on the masses
Business
There is Rs20 hike in the high-speed diesel rate too
ISLAMABAD (Dunya News) - The caretaker government on Tuesday increased the price of petrol by Rs17.50 per litre, taking the price to record high of Rs290.45 per litre, Dunya News reported.
The petrol price is now unprecedented in the history of the county, taking the inflation to an upward trajectory.
Other than that, the price of high speed diesel was also increased by Rs20 per litre. After the increase, high speed diesel will be available at Rs293.40 per litre.
— Ministry of Finance (@FinMinistryPak) August 15, 2023
After this announcement, the new prices came into effect at 12am (night between Aug 15 and 16).
The Ministry of Finance (MoF) announced the revised prices late in the night after clearance from Caretaker Prime Minister Anwaarul Haq Kakar, who was sworn in on Monday.
Read more: SBP says inflation will ease but what about soaring prices of power, gas, POL products?
In this connection, the finance division said prices of the two key fuels were jacked by because petroleum prices in the international market had increased during the last fortnight.
However, there was no change in the prices of kerosene and light diesel oil.
The move shouldn’t be a surprise given the agreement Pakistan has reached with the International Monetary Fund (IMF) which makes it impossible for Islamabad not to fulfil the conditions set by the world’s top financial institution.
Soon after the two sides had inked the deal, IMF Managing Director Kristalina Georgieva stressed that Pakistan would have to accelerate structural reforms.
Read more: Increasing energy prices, interest rates, tax collection remains IMF's focus
Praising the coalition government for the 2023-24 budget, she said it was a welcome step toward fiscal stabilization, while calling for enhancing tax collection, which, she said, was critical to strengthen public finances, and to eventually create the fiscal space needed to bolster social and development spending.
At the same time, she called for reducing state expenditure and bringing changes in the energy sector through steps like increase in tariff while modifying the subsidy structure.
“Maintaining discipline over non-critical primary expenditure will be essential to support budget execution within the envisaged envelope. In parallel, the authorities urgently need to strengthen energy sector viability by aligning tariffs with costs, reforming the sectors cost base, and better-targeting power subsidies."
That's why former prime Minister Shehbaz Sharif was repeatedly telling the people that the $3 billion deal reached with the IMF had been negotiated only because of the harsh realities as it wasn’t their choice but only a compulsion.
Read more: Pakistan: What lies ahead in post-IMF deal period?
But what was the reason? The tough conditions set by the world’s top financial institution, which translates into more rate hikes, higher gas and electricity tariffs, reduced subsidies and thus more burden for common man.
