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ISLAMABAD: The government has announced to increase petroleum products’ prices by Rs30 per litre from Thursday with their implementation from midnight in an effort to revive the International Monetary Fund (IMF) programme.

The increase in petroleum prices was announced by Finance Minister Miftah Ismail at a hurriedly-called press conference. He expressed the hope that now reaching an understanding on staff-level agreement with the IMF would be easier as constructive discussion are being held with the Fund on revival of the EFF.

He said the decision has been taken to increase the prices of petrol, diesel, kerosene and light diesel by Rs30 per liter from Thursday mid-night with new prices of Rs179.86 per liter petrol, Rs174.15 per liter diesel, Rs155.56 per liter kerosene oil, and Rs148.31 per liter light diesel.

The minister acknowledged that it would contribute to inflation to some extent but the government had no other choice as it has already provided Rs56 per litre subsidy on diesel.

However, he said that the decision was taken to reduce pressure on rupee, improve stock market, and most importantly it would bring balance in economy.

The minister stated that increase in petroleum prices was inevitable and would make things easier including agreement with the Fund on targets for the next fiscal year.

No raise in POL products’ prices for now: govt

The minister said that the government has preferred the country’s interests over political capital of the party as Rs55billion subsidy during the first fortnight of the ongoing month was greater compared to Rs42 billion monthly for the running of the civil government.

He added that the Fund has been pressing for an increase in petroleum prices but the decision has been taken in the interest of the country as consumption of petroleum products has surged by 20 per cent.

He said that he cannot give any guarantee of price decline if the prices in the international market remain high. He stated that a caretaker setup would be announced after 23rd August 2023.

The finance minister also criticized the previous government for Rs10 per liter cut in petrol and diesel prices.

Federal government on Thursday announced an increase of petrol and High Speed Diesel (HSD) prices by Rs 30 per litre against the recommended ex-depot price of petrol at Rs 66.16 per litre and Rs 81.07 per litre for HSD for first quarter of June and five last days of May.

According to the sources, the price calculated for Oil Marketing Companies the estimated price differential claims (PDC) of OMCs level for next 20 day May 27-June 15) is Rs 66.16 per litre on petrol and Rs 81.07 per litre on HSD and projected ex-depot price excluding petroleum levy (PL) and general sale tax (GST) on is Rs 215 per litre for petrol and Rs 223.25 per litre for HSD for next fortnight (June -15).

Based on current international prices, the price differential claims for Oil Marketing Companies/refineries is projected at Rs 48 billion for May 16-31 fortnight and projected PDC is at Rs 47 billion for May 1-15.

An official of Petroleum Division on the condition of anonymity told Business Recorder that the IMF has estimated that Pakistan requires Rs1.4 trillion in subsidies for keeping the POL prices unchanged for next financial year. On May 19, State Minister for Energy Musadiq Malik also said that Rs 700-800 billion budget was needed for the fuel subsidy.

The government remains committed to reviving the IMF programme and put Pakistan back on a sustainable growth path, said Finance Minister Miftah Ismail.

Copyright Business Recorder, 2022

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