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Massive Hike in Petrol and Diesel Prices in “National Interest”

Date: August 01, 2023

In a move aimed at fulfilling commitments with the International Monetary Fund (IMF), Finance Minister Ishaq Dar announced a substantial increase in petrol and diesel prices by Rs19 per litre. The revised prices took effect immediately, and the decision comes as the government’s term is set to end on August 12.

The announcement, which was initially due on July 31, was postponed as officials deliberated on ways to mitigate the impact of the price hike on inflation-weary citizens. However, the agreement with the IMF on imposing the petroleum development levy (PDL) left no room for avoiding the increase.

The new prices, effective from August 1, are as follows:

  • Petrol: Rs253 to Rs272.95 (an increase of Rs19.95 per litre)
  • Diesel: Rs253.50 to Rs273.40 (an increase of Rs19.90 per litre)

Finance Minister Dar emphasized that adhering to the IMF agreement was essential, and the government had attempted to explore possible reductions or adjustments to ease the burden on the public. However, the commitment to the IMF made the increase unavoidable.

He clarified that had the government not been bound by the IMF agreement, efforts would have been made to lower the petroleum development levy and provide relief to the masses. Dar also highlighted the significant rise in international market prices for high-speed diesel, contributing to the government’s decision to hike local rates.

In the interest of national economic stability and to meet IMF requirements, the decision to implement the price hike was deemed necessary. The IMF’s stringent conditions include raising the petroleum levy to Rs60 per litre as part of the $3 billion Standby Agreement.

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