On Sunday, Pakistan’s cash-strapped government raised gasoline and diesel prices by Rs 35 each, giving another shock to the country’s inflation-stricken population.
Finance Minister Ishaq Dar made the announcement in a televised speech on Sunday morning, ruining people’s weekly holidays, as in the past prices were adjusted biweekly, from the first to the sixteenth of every month.
“We have decided to increase the price of gasoline and diesel by Rs 35 each. The price of kerosene oil and light diesel has been increased by Rs 18 each,” Dar said, adding that the new prices would take effect at 11am on Sunday.
After the hike, the price of gasoline was set at Rs 249.80 per litre, high-speed diesel at Rs 262.80, kerosene at Rs 189.83 and light diesel at Rs 187 per litre.
Last week, Prime Minister Shehbaz Sharif had said his party’s ruling alliance was ready to swallow the International Monetary Fund’s “tight” conditions to revive the lending program and has clearly communicated his intentions to complete the ninth revision to the IMF
Pakistan entered a $6 billion IMF program under Imran Khan’s government in 2019, which was increased to $7 billion last year. The ninth review of the program is currently pending and talks are taking place 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 for talks with officials on the implementation of their conditions attached to the aid package.
Dar said speculation was rife on social media about a Rs 50 rise in petrol and diesel prices. “Because of this, we have received reports of artificial shortages in the market.” “The Pakistani rupee suffered a devaluation last week and now we are seeing an 11 percent increase in the prices of petroleum products in the international market,” he said.
The cash-strapped Pakistani currency depreciated to its lowest level against the US dollar on Friday in the interbank and open market to close at 262.6 rupees.
Dar said the government had not increased the price of gasoline since October last year until January 29 and also lowered the prices of diesel and kerosene.
Before the price hike, long queues of motorists were observed at service stations. The fever was fueled by reports of shortages and massive price increases.
Fahad Raud, head of equities at Ismail Iqbal Securities, commenting on the price increase, said it was “in line with expectations” and warned of a further increase.
“This is only a partial increase as it does not incorporate the recent exchange rate depreciation. More increase will come in mid-February,” he tweeted.
Former Prime Minister Imran Khan criticized the price hike, saying the “total mismanagement” of the economy by the “imported government” has “crushed the masses and the wage class.”
“Rise in electricity and gas prices and record inflation of 35% expected with a mini budget of Rs 200 billion,” Khan, the chairman of Pakistan’s Tehreek-e-Insaaf Party, tweeted.
Former finance minister Asad Umar said the public had had enough of inflation, calling the government’s move a “punishment” for the people.
Pakistan is facing the worst economic crisis as its reserves have fallen to a critical level of $3.7 billion and it needs 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 long-term planning in sight to deal with similar economic situations.
