Amid economic turmoil, Pakistan hikes up fuel prices | Business and Economy News
The decision comes amid deadlocked talks with the global lender the IMF, which has yet to disburse the crucial $1.1 billion.
Pakistan hiked petrol and diesel prices after the country’s currency fell sharply this week and just days before the International Monetary Fund (IMF) visited the country to discuss Pakistan’s stalled ninth funding review.
Finance Minister Ishaq Dar said at a press conference on Sunday that the price of gasoline will rise by Rs 35 to Rs 249.80 ($1) per liter and high-speed diesel will rise to Rs 262.8 ($1.05) per litre.
The announcement was made just 10 minutes before the new prices went into effect at 11:00 (05:00 GMT).
The government has announced new prices for petroleum products, effective from 11:00 on January 29, 2023.
High speed diesel – Rs 262.80 per litre.
MS gasoline – 249.80 rupees per liter.
Kerosene oil – 189.83 rupees per liter.
Light diesel fuel – 187 rupees per liter.
— Ministry of Finance (@FinMinistryPak) January 29, 2023
“We will have to take into account the rise in global oil prices and the devaluation of the rupee,” Dar said. “This increase is being made immediately on the advice of the oil and gas regulator, who said there were reports of artificial fuel shortages and hoarding in anticipation of price increases, so this price increase is being made immediately to combat that.”
Long queues were reported outside gas stations after people filled their tanks ahead of the announcement.
The reaction to Dar’s statement was met with swift condemnation and criticism of the government’s handling of the country’s economic situation.
How will the poor survive? Why [is] this nation is so insensitive to the simple issues of the lives of the poor and the middle class,” Shabbar Zaidi, former chairman of the Pakistan Federal Bureau of Revenue, tweeted.
An increase in the price of oil by 35 rupees. inflationary spiral. How will the poor survive? Why is this nation so insensitive to the simple questions of the lives of the poor and middle classes. When it should have been done, why so late? Pakistan does not operate in the current economic paradigm. Save
— SyedShabbarZaidi (@SShabbarZaidi) January 29, 2023
Zartaj Rathor, a resident of Lahore, tweeted: “Unfortunately, this inflation will take lives. They are [the government officials] without cutting back on luxury spending, all the burdens and obstacles will always fall on the people who pay huge taxes.”
Gasoline and diesel prices in Pakistan rose by Rs 35 per litre. Unfortunately, this inflation will take people’s lives. They don’t cut their spending on luxury, all the burdens and obstacles will always be on people who pay huge taxes. pic.twitter.com/1fUYe2qmJI
— Zartaj Rathor (@RathoreZartaj) January 29, 2023
Pakistan is facing a balance of payments crisis amid a sharp fall in the value of the rupee, which fell to historic lows after it lost almost 12 percent of its value against the US dollar earlier this week after the currency restrictions were lifted.
A cash-strapped country is seeking vital assistance from the IMF. However, the Washington lender has yet to approve a crucial $1.1 billion tranche that was originally due last November as part of a $6 billion bailout package secured in 2019.
A successful IMF visit is critical for Pakistan, which is facing an increasingly acute balance of payments crisis and is desperate to secure external financing with less than three weeks of import coverage in its foreign exchange reserves.
Pakistan was also hit by a nationwide power outage earlier this week linked to a cost-cutting measure estimated to cost the textile industry alone $70 million.