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IMF-driven: Pakistan steeply hikes petroleum prices to revive bailout programme

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IMF-driven: Pakistan steeply hikes petroleum prices to revive bailout programme
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Motorists wait to fill their vehicles' tanks at a petrol station in Islamabad following an increase of petroleum prices by the government in June (Photo credit: AFP)


Motorists wait to fill their vehicles' tanks at a petrol station in Islamabad following an increase of petroleum prices by the government on Thursday. — AFP


Motorists wait to fill their vehicles' tanks at a petrol station in Islamabad following an increase of petroleum prices by the government on Thursday. — AFP


Islamabad: The Pakistan government has steeply hiked petroleum prices to fall in line withthe tough preconditions set by the International Monetary Fund (IMF) to revive the USD 6 billion bailout package that had been stalled.

With effect from midnight on Thursday, prices of all petroleum products across the board, went up by about Rs14-19 per litre, PTI reported.

The Finance Ministry notification says that the government imposed a Rs 10 per litre petroleum levy on petrol and Rs 5 each on high-speed diesel (HSD), kerosene and light diesel oil (LDO).

As a result, the per-litre price of petrol has been increased by Rs 14.85, HSD by Rs 13.23, kerosene by Rs 18.83 and LDO by Rs 18.68.

The increased ex-depot prices noware: Petrol Rs 248.74 per litre, HSD Rs 276.54, kerosene Rs 230.26, and LDO Rs 226.15.

Finance Minister Miftah Ismail explained to the media that the petroleum levy was imposed to revive the IMF programme suspended four months ago after the previous government led by Imran Khan pushed back from signed agreements.

This is the fourth hike in petroleum under the incumbent government which took power in April.

The IMF has set tough preconditions like hiking electricity tariffs and imposing a levy on petroleum products to revive the stalled bailout programme.

The IMF Fund also asked Pakistan to set up an anti-corruption task force to review all the existing laws that were aimed at curbing graft in the government departments.

After implementing the conditions, the IMF would present Pakistan's request for the approval of the loan tranche and revival of the programme to its executive board - a process that may consume another month.

Cash-starved Pakistan is facing increasing economic challenges, with high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency.

On June 22, Pakistan secured a deal with the IMF to restore the stalled USD 6 billion assistance package and unlock doors for financing from other international sources.

The make-or-break deal was reached following the IMF staff mission and the Pakistani team, led by Finance Minister Ismail, agreeing on an understanding on the 2022-23 budget after the authorities committed to generate Rs 43,600 crore more taxes and increase petroleum levy gradually up to Rs 50 per litre, the Dawn newspaper reported.

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TAGS:Pakistan petroleum prices hiked Rs 14-19 hike per litre IMF dictates to revive 6 bil USD loan cash-strapped economy 
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