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Widespread Anger Grips Pakistan Over Biggest Ever Hike in Fuel Prices After IMF’s Advice

11:32 GMT, 27 May 2022
© AP Photo / Anjum Naveed
Dhairya Maheshwari
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Islamabad has been seeking economic assistance from international lenders after its forex reserves fell to $10.2Bln on 13 May. Last week, the government banned the import of non-essential luxury items under an “emergency economic plan” to “save the country’s precious foreign exchange”.
Sputnik
Pakistan's public has lashed out at the government of Prime Minister Shehbaz Sharif after the federal authorities announced a hike of $0.15 (30 Pakistani rupees) per litre of petrol, diesel and kerosene prices.

The increase in consumer fuel prices is the steepest ever in the country’s history and came into effect from Friday midnight, just hours after the federal Finance Minister Miftah Ismail announced the revised prices at a press conference in Islamabad.

The minister said that the price of petrol was now 179.86 ($0.90) Pakistani rupees per litre, high-speed diesel (HSD) was 174.15 ($0.87) per litre, and kerosene was 155.56 ($0.78) per litre.
Pakistan's social media users have described the increase in prices as the “worst-ever” by any sitting government.
Pakistanis react to hike in fuel prices
© Photo : Twitter
In the city of Lahore, people were seen queuing up at petrol pumps late on Thursday evening, before the revised prices kicked in.
Pakistan’s former Prime Minister Imran Khan has predicted that the people will suffer a “massive dose of inflation” as a result of the steep rise in prices.
Khan also criticised the Sharif government for not accepting Russia’s alleged offer to supply Islamabad with discounted crude, which he says would have been 30 percent cheaper than what Islamabad is getting from its present suppliers in the Middle-East.

“In contrast, India, a strategic ally of the US, has managed to reduce fuel prices by 25 rupees ($0.12) per litre by buying cheaper oil from Russia,” Khan commented, referring to Delhi’s decision this week to cut fuel prices.

Rise in Fuel Prices Necessary to Save Pakistan From a ‘Bad Situation’, Says Gov’t

Federal Finance Minister Miftah Ismail held his press conference just hours after he returned from Doha in Qatar where Pakistani officials had been locked in week-long talks with the International Monetary Fund (IMF) over releasing the next tranche of the $6 billion Extended Fund Facility programme.

Ismail remarked that the fuel price rise was necessary to keep Pakistan from “drifting to a bad situation".

Pakistan Declares Economic Emergency as It Bans Luxury Imports to Save Foreign Currency Reserves
19 May 2022, 14:39 GMT
In a press release after talks ended on 25 May, the IMF complained about the previous Khan-led government’s decision to reduce fuel prices on 28 February, against its advice.
The IMF, it said, has been calling upon Islamabad to end fuel subsidies in a step towards "liberalising" the economy further.

“On the fiscal side, there have been deviations from policies agreed in the last review, partly reflecting the fuel and power subsidies announced by the authorities in February,” the IMF release said.“ The team emphasised the urgency of concrete policy actions, including in the context of removing fuel and energy subsidies and the 2023 full-year budget, to achieve programme objectives".

Reuters reported on Thursday that the IMF had agreed to release a $900Mln tranche under the EFF programme, on condition that Islamabad reverse the decision to cut fuel prices.
RussiaAsiaImran KhanpetroldieselShehbaz Sharifcrude oilPakistan
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