Amid rising oil prices in the international market and uncertainty regarding the future of energy exports from several countries, sources estimate that Pakistan, which is already indulged in internal political turmoil and has the opposition marching against the government due to rising inflation, offers the lowest per liter price of petrol in the South Asian region.
According to local news outlets, the per liter price of petrol in Pakistan stands at $0.8, whereas the other regional countries offer it at no less than $0.9 per liter. The per liter cost of petrol in Sri Lanka is $0.99, followed by Bangladesh where it stands at $1.03. The highest per liter cost of petrol in the region is offered by India, which sells it at around $1.5 per liter.
However, it is important to note that the petrol prices in India vary in different countries, but none sell it at a price even close to what Pakistan sells it at. Petrol prices in Mumbai, a city on India’s west coast, stand at around $1.5 per liter, whereas the price of petrol in Chennai and New Dehli stand at around $1.38 and $1.37, respectively.
Read more: PM Khan slashes petrol, electricity prices
In a recent announcement on March 1, Prime Minister of Pakistan Imran Khan slashed Rs. 10/liter off the prices in petrol and diesel and promised the public that there would be no further increase in their prices until the next budget. However, this decision was met with a lot of criticism from analysts and economists alike, who dubbed this to be a “political stunt” and a “checkmate” to the opposition ahead of the no-trust motion.
According to one political commentator, Imran Khan made this decision ahead of the possibility of early elections taking place. He added that it was a Goodbye to the IMF and Hello to the elections. Under a deal with the International Monetary Fund (IMF), Pakistan cannot introduce amnesty schemes as they would go against the commitments made with the IMF.
Petrol prices per litre across South Asia, in US dollars:
🇵🇰: $0.82
🇲🇻: $0.94
🇱🇰: $0.99
🇧🇩: $1.03
🇧🇹: $1.25
🇳🇵: $1.27
🇮🇳: $1.50Data source: GlobalPetrolPrices
— South Asia Index (@SouthAsiaIndex) March 28, 2022
Shortly after the decision to cut Rs. 10 in petrol prices, a government delegation was supposed to answer before a reviewing committee in the IMF. In the review, the IMF committee slammed the government’s decision to cut fuel prices and remained dissatisfied with the government’s implementation of its commitments.
Answering the reviewing committee, Pakistan’s Finance Minister Shaukat Tarin and Governor of State Bank Reza Baqir undertook in writing that they would not grant “further tax amnesties” and avoid the “practice of issuing new preferential tax treatments or exemptions.” Currently, the IMF is not convinced of the government’s justifications and has asked the government how it would fund the $1.5 billion subsidy announced by the Prime Minister.
Read more: Indian professor compares low petrol prices in Pak with India’s
Following the government’s announcement of the price decline, the opposition criticized the decision and pondered how the government could give out relief packages just ahead of the seventh review of the IMF. PML-N Information Secretary Marriyum Aurangzeb said in a statement that the move was a “futile effort” by PM Imran to save his government.
$6 billion deal with IMF
Pakistan went to the IMF in 2019, and under the agreement, Pakistan is to receive about US$6 billion for a period of 39 months, and so far, it has received almost half it.
The IMF program is scheduled to end in September.