Finance Minister Ishaq Dar announced an increase in petrol and diesel prices by Rs35 per litre effective as of 11 am on Sunday.
The minister made the announcement in a brief televised address to the nation today and maintained that Kerosene oil and light diesel oil prices were jacked up by Rs18 per litre.
Rejecting reports of petroleum shortages, Dar alleged that “artificial shortages” were being created.
“Ample fuel is available and under normal circumstances, there would be no reason for such shortages to occur,” he said.
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“On social media, it was reported that [fuel prices] were to be jacked up by Rs47-80 which unfortunately became an incentive for them [hoarders],” he added, “because of this, we have received reports of artificial shortages in the market.”
It may be noted that on January 15, Dar had announced that fuel prices would remain as they were for the remaining half of the month, until January 31.
Following today’s hike, petroleum is to be sold at a rate of Rs249.80 per litre, while diesel prices have been raised to Rs262.80 per litre, kerosene oil to Rs189.83 per litre and light diesel oil to Rs187 per litre.
Govt announced new prices of Petroleum Products with effect from 11.00 hrs, 29 Jan ,2023.
High Speed Diesel-Rs 262.80 per litre
MS Petrol —Rs 249.80 per litre
Kerosene Oil -Rs 189.83 per litre
Light Diesel Oil – Rs 187 per litre
— Ministry of Finance (@FinMinistryPak) January 29, 2023
As the country experiences crippling inflation, Pakistan is expected to narrowly escape defaulting on its international payments after the International Monetary Fund (IMF) finally agreed to continue discussions under the ninth Extended Fund Facility (EFF) review.
But the development was only followed after Prime Minister Shehbaz Sharif categorically said his government is ready to take all the necessary decisions required to revive the IMF programme worth $6.5 billion.
Of the four major prerequisite conditions, needed to be met to revive the lending programme, the government has fulfilled the first one by letting the market forces determine the rupee-dollar exchange rate.
Accordingly, the local currency plunged by Rs24.54 (or 9.61%) to an all-time low at Rs255.43 against the US dollar in the interbank market on Thursday.
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The latest fall came as the government ended its control over the rupee-dollar exchange rate as part of the four conditions put forth by the IMF.
Speaking to The Express Tribune, Ismail Iqbal Securities Head of Research Fahad Rauf said that “the steep decline in the exchange-rate may increase petroleum products (POL) prices by up to 50% in the weeks and months to come – if it remains at its current level. The petroleum development levy is set at Rs50/litre on petrol and diesel each, and a sales tax is imposed at 17% on POL products as well, going forward.”
The price of petrol is projected to increase by 44% to Rs309/litre, while the price of diesel may spike by 50% to Rs341/litre.
In addition to this, all imported goods will become more expensive by an additional 10%, due to the nearly 10% drop in the value of the rupee against the greenback on Thursday. These goods will include food (wheat and wheat-flour, pulse and cooking oil), cotton for textile, steel scrape and energy products (oil, gas and coal).
The rising price of essential commodities, however, will hit the common man the most, particularly those from the lower-income segments of society who were already struggling due to the ongoing financial turmoil and political upheaval.