Finance Minister Ishaq Dar announced a hefty Rs19 per litre hike in petrol and diesel prices on Tuesday, claiming that it was done in the “national interest” as agreed with the International Monetary Fund (IMF).
The new prices went into effect immediately.
The announcement was scheduled on July 31, but the government did not issue new rates because officials sought to retain or cut rates in order to mitigate the impact of the price increase on inflation-weary citizens.
Dar, speaking as finance minister for the final time before his government’s term ends on August 12, said the rise was unavoidable since Pakistan had agreed with the IMF to impose a petroleum development levy (PDL) on rates.
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“…we tried to either reduce or see what could be adjusted in its working. But we all know about our commitments with the IMF on the petroleum development levy,” Dar mentioned.
The finance minister stated that if the government had not been in an agreement with the IMF, the PDL would have been decreased to bring assistance to the citizens.
Dar stated that he would not repeat the actions of the previous government, which reduced the price of gasoline and violated IMF pledges.
The finance minister stated that the price of high-speed diesel has risen dramatically in the worldwide market, prompting the government to raise domestic prices.
“Keeping in mind national interest, it is crucial that we pass on the minimum [amount] which has been calculated,” the finance minister added.
The IMF has imposed stringent conditions to ensure that the $3 billion Standby Agreement continues smoothly. One of the requirements of the agreement is to raise the petroleum levy to Rs60 per litre.