Hours before the Shehbaz Sharif government tabled a supplementary finance bill in the Pakistan National Assembly, the cash strapped country hiked the fuel prices to a historic high in a bid to appease the International Monetary Fund (IMF) for unlocking the critical loan tranche. It must be noted that this moves by the govt is based on a precondition by IMF to release funds. The government has proposed to hike goods and services tax to 18 per cent – a move aimed at raising PKR 170 billion in revenue to tackle the ongoing economic crisis.
Citizens in Pakistan will pay PKR 272 per litre for petrol, while an equal quantity of diesel will cost PKR 280 effective from Wednesday night itself. In addition, kerosene oil has also become costlier and will retail at PKR 202.73 per litre.
The hike is expected to trigger a further spike in inflation in the nation where even basic commodities are now retailing at extremely high prices.
This is the second time in two and a half weeks that the fuel prices have been hiked. Earlier on Jan 29th the petrol price was increased by 35 rupees while high-speed diesel went up to 262.8 rupees ($1.05) per litre.
A final rounds of talks between Pakistani authorities and IMF will be held on Thursday to finalize the ninth review of the Extended Fund Facility (EFF). If approved then it would pave way for a $1.2 billion tranche for the country.