By India Blooms News Service Feb 17, 2023
Islamabad:Pakistan on Thursday raised the fuel prices to a historic high in a bid to meet the conditions set by the International Monetary Fund (IMF) to release a tranche of a bailout package, media reports said.
The hikes were announced soon after the government presented a mini-budget that imposed multiple taxes.
Local media outlet GEO TV reported that petrol prices have gone up by PKR 22.20, while diesel has been hiked by around PKR 17.
In addition, kerosene oil has also become costlier and will retail at PKR 202.73 per litre. The new prices will come into effect from 12 am on Thursday.
Pakistan is reeling under a severe economic crisis, worsened by devastating floods in 2022.
On Saturday, the discussions to access the stalled $1.1 billion of bail-out package, failed to make headway after 10 days of talks.
Both government and IMF officials said the talks will continue.
The IMF had agreed to give Pakistan a $6.5 billion loan in 2019. Pakistan has to implement the conditions laid by the IMF to release at least $ 1.1 billion of the funds, which have been delayed since last December.
The IMF has asked Pakistan to return to a market-based exchange rate and higher fuel prices, and introduce fiscal measures, including new taxes.
Pakistan had recently increased fuel prices, which sent the inflation to a record high - 27.5% on-year in January - and strained supplies of some imported goods.
The latest hike in fuel prices will further push inflation to new highs.
As it is, Moodys Analytics has projected Pakistans inflation to be at an average of 33% in the first half of 2023 before trending lower, reported Reuters.
It also said that the monetary package from the International Monetary Fund is unlikely to put the countrys economy on a recovery path.