Petrol, diesel prices continue to surge amid social unrest

As Pakistan continues to grapple with high electricity bills, the caretaker government on Thursday further jacked up the petrol and diesel prices by over 14 Pakistani Rupees (PKR) taking the price past 300 PKR, Geo News reported on Friday.

The Finance Division said the hike was due to the “increasing trend of petroleum prices in the international market and exchange rate variations”.

The Finance Division said that the price of petrol will go up by 14.91 PKR per litre, and the price of high-speed diesel (HSD) by 18.44 PKR per litre. Now, the price for one litre of petrol will be 305.36 PKR, and the HSD price will be 311.84 PKR.

Notably, the local currency is at an all-time low following an easing in import restrictions that has increased the greenback's demand and rising risks associated with financing the country’s current account deficit, Geo News reported.

The PKR has lost over 15 value in the interbank market since the formation of the caretaker government which is tasked with overseeing at least one review of the International Monetary Fund (IMF) USD 3 billion standby arrangement and steering the country through to a national election that is in theory due to take place by November, according to Geo News.

Earlier on Friday, The News International had reported that the interim government was likely to increase the price of petrol and diesel citing sources in the oil industry.

According to the working of the oil industry, regarding the ex-depot prices of petroleum prices, the price of petrol and high-speed diesel would likely record a substantial increase. The government would review the prices of petroleum prices on Thursday night under the fortnightly review of the prices’ formula, Geo News reported.

On August 1, the Pakistan government raised the price of petrol by 19.95 PKR per litre and of high-speed diesel by 19.90 PKR per litre.

On August 16, the price of petrol price was raised by 17.50 PKR per litre and the price of high-speed diesel was increased by 20 PKR per litre.

Notably, Pakistan is battling a huge economic crisis, with staggering inflation and depleting Forex reserves.

Although the IMF approved a USD 3 billion bailout to support Pakistan in avoiding a default on its debt repayments, Islamabad is finding it difficult to implement all the conditions imposed by the lender.

With sky-high inflation and foreign exchange reserves barely enough to cover one month of controlled imports, Pakistan has been facing its worst economic crisis in decades, which analysts say could have spiralled into a debt default in the absence of the IMF deal.

Under the conditions, electricity prices have surged in Pakistan, which has led to social unrest in the country. The IMF has requested Islamabad to provide a written plan after the government decided to seek clearance from the Washington-based lender about its proposal to ease the burden on furious citizens over a hike in electricity bills, The News International reported citing sources.

The Pakistan government even had to impose additional taxes of 215 billion PKR and slash expenditures by 85 billion PKR in order to strike an agreement with the IMF. (ANI)