ISLAMABAD: Finance Minister Miftah Ismail announced a huge increase in the price of petroleum products on Thursday, following the International Monetary Fund’s (IMF) focus on scrapping commodity subsidies.
In a press conference, the finance minister said the government has decided to hike the price of petrol, diesel, kerosene oil, and light diesel by Rs30, effectively from May 27.
New prices of fuels (per liter):
- Petrol — Rs179.86
- Diesel — Rs174.15
- Kerosene oil — Rs155.56
- Light diesel — Rs148.31
The finance minister acknowledged that part of the cost had been passed to the people, but that the government was still losing money despite the large rise in the price of petroleum goods. He promised that a staff-level agreement with the Fund would be reached shortly.
A day earlier, Pakistan and the IMF were unable to achieve an agreement at the staff level after the Fund said that there were departures from the policies agreed upon by both parties.
The PTI-led government first agreed to the IMF’s demand that power and petroleum products be raised in price, but Imran Khan announced subsidies on both commodities later in March, and the present administration is continuing with the same arrangement.
Following the decision to raise prices, the finance minister said that financial markets would be stable, the rupee would appreciate, and the economy would benefit.
In answer to a query, Ismail said that inflation will undoubtedly rise owing to an increase in the price of petroleum goods. “However, tell me what alternatives we had to make this move.”
Ismail said Khan, in violation of the IMF agreement, announced petroleum product subsidies as his government’s term drew to a close.
“Each of us is the proprietor of a nation. How can we afford [such subsidies] that cost three times as much as operating the government’s day-to-day operations? “According to the finance minister.
People who own automobiles, factories, and generators, according to Ismail, are obtaining subsidies, which is an unfairness to the lower-income sector of society.
“Indeed, the government’s shortcoming is that inflation is growing, but we have offered subsidies on goods at utility shops and are making sugar more affordable than Imran Khan’s administration,” he remarked.
Ismail said Prime Minister Shehbaz Sharif’s decision to raise the price of petroleum items by Rs30 was difficult, but that the present administration will make efforts to protect the economy.
“Khawaja Asif Sahab, in today’s conversations, underlined that it would not be a prudent move to [destroy] the state and preserve our politics,” Ismail remarked, quoting Defence Minister Khawaja Asif.
The finance minister emphasized that the existing government will propose the fiscal budget for FY2022-2023 and ruled out the establishment of a caretaker government, stating that the current administration would finish its term.