ISLAMABAD: The government has decided to increase the price of petrol by Rs30 per liter, the second hike in a week, Finance Minister Miftah Ismail announced on Thursday, as Pakistan desperately seeks to renew a $6 billion loan program agreed with the International Monetary Fund (IMF).

Pakistan entered a three-year, IMF deal in 2019, but is struggling to implement tough policy commitments. Talks in Doha last week to release funds to stabilize Pakistan’s struggling economy ended without a breakthrough as the Fund pushed Islamabad to roll back subsidies to the oil and power sectors.

A pending tranche of over $900 million is contingent on a successful IMF review, and would also unlock other multilateral and bilateral funding for Pakistan, whose foreign reserves currently cover just two months’ worth of imports.

In a news conference, Ismail announced the government was once again increasing the prices of petroleum products. 

“Price of petrol will be Rs209.86 per liter from Rs 179.86 per liter,” he said, with the new prices to come into effect from midnight, June 2. 

He said the government was suffering a loss of Rs9 per liter on the price of petrol and was not charging consumers a single rupee of tax on the product. 

Ismail said the price of diesel would go up to Rs204.15 per liter, as the government bears a loss of Rs23 per liter on the price of diesel. 

After the latest increase in prices, petrol will be priced at Rs209.86, diesel at Rs204.15, kerosene oil at Rs181.94 and light diesel at Rs178.31.

The minister acknowledged the surge in prices would cause inflation to rise in the country but added that the prices of petroleum products were “extremely high” around the world.

To offset the inflationary pressures, Ismail said the government had decided to subsidize the price of wheat and sugar at utility stores throughout the year, while China had agreed to refinance its deposit of around $2 billion.