The government will once again raise the petroleum levy to meet the remaining one prior condition that International Monetary Fund (IMF) had set for calling the board meeting to revive the program.
While speaking at a seminar, Finance Minister Miftah Ismail hinted that the petroleum levy would now be reviewed and the IMF Board would hold its meeting by the end of the next month. As a result, government officials confirmed to the media that the government will have to jack up the petroleum levy further from August 1, 2022, for implementing the last prior action of IMF.
Ismail said that the IMF had set the prior conditions of approval of the new budget, a memorandum of understanding with the provinces to create cash surpluses, raising petroleum levy rates, increasing electricity prices in July, August, and October, and increasing interest rates. He said that these conditions have been met.
The government has already imposed an Rs10 per liter levy on petrol from July, which will have to be further increased by another Rs10 on August 1 until it gradually reaches Rs50 per liter. Currently, petrol is being sold at Rs230.24 per liter and diesel at Rs236.
Due to rising dollar rate
PDM Govt has to announce an increase in petrol price on 1st August else risk of Pakistan going bankrupt will increase https://t.co/1tiiflOptG
— Naveed Nadeem (@naveednadeem91) July 27, 2022
Petrol prices to increase?
Pertinent to mention, oil prices in the international market declined, however, the government will be unable to pass on the benefit of reduced prices of petroleum products to the consumers in the country.
According to the details, the petroleum products prices may significantly go up from August due to massive currency devaluation during the past 10 days, which could stoke hyperinflation in the country.
A day earlier, the local currency plunged to a new low against the US dollar, which continued to strengthen for the ninth straight session in the interbank market. The greenback closed at an all-time high of Rs236.02 in the interbank market, up from Rs232.93 a day earlier, as it shed Rs3.09 or 1.31%.