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Thursday, May 23, 2024

Another day another hike in fuel price: Third in last 20 days

Withdrawal of all subsidies on petroleum products causes further hike in fuel price to meet IMF conditions

The government brings another hike in fuel price by increasing it upto 29 percent on Wednesday, withdrawing subsidies on fuel to reduce the fiscal deficit and meet the conditions of International Monetary Fund (IMF) in order to secure critical support.

Read more: PDM govt succumbs to IMF as it hikes petrol rate

In last 20 days, this is the third cut in fuel subsidies. The prices of high-speed diesel (HSD), petrol, kerosene, and light diesel oil (LDO) have been surged by 83 pc, 56 pc, 73pc and 68.4pc, respectively, since May 26. The ex-depot price of petrol has now reached at Rs233.89 per liter, HSD Rs263.31, kerosene Rs211.43, and LDO Rs207.47.

Read more: Govt increases petrol price to Rs209.86 per litre

During an unscheduled news conference with Minister of State for Petroleum Musadik Malik, Finance Minister Miftah Ismail said the price hike was unavoidable “to save the country from the default”.

Mr. Miftah Ismail blamed the previous government and harsh global market conditions as the reasons for taking strict measures. This would ultimately increase inflation even more and add to the challenges faced by the people.

Prime Minister Shahbaz Sharif also shared in a tweet, “acutely aware of the impact that a fuel price hike causes. Govt is left with no choice but to raise the prices due to IMF deal that PTI govt signed. Will take the nation into confidence on the specifics of the IMF-PTI deal soon. We will get out of these economic difficulties, IA”.

He added that all the subsidies and price differential claim have now been eliminated. Now, the government is hopeful to reach an agreement with the IMF as there is no more government loss on the sale of petroleum products.

Also, he explained that government had attempted to safeguard the poor by giving Rs2,000 to eight million households under the Benazir Income Support Program in June and would raise this support to six million more families in the next fiscal year.

Again, he said the former government was very incompetent that throughout the Covid pandemic, when the whole world was observing minor inflation rates, Pakistan was among the top three most expensive countries. The former government neither signed contracts when oil and gas prices were at $6 nor set up buffers for tough times.

However, out of various harsh consequences of hikes in fuel price, ARY news reported that the goods transporters have stopped operations at Karachi ports and threatened to go on strike after a late-night hike in fuel prices, resulting in fears of countrywide supply-chain problems.