Pakistan hikes fuel prices to meet IMF conditions, deepening economic crisis

An employee updates the fuel prices at a fuel station in Karachi on September 1, 2023. (AFP)
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Updated 01 September 2023
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Pakistan hikes fuel prices to meet IMF conditions, deepening economic crisis

  • Price of petrol has been increased by Rs14.91 to Rs305.36 a liter and diesel by Rs18.44 to Rs311.84
  • Pakistan committed to petroleum levy of up to 50 rupees a liter alongside string of painful measures

ISLAMABAD: Pakistan announced an increase in petrol and diesel prices on Friday to meet fiscal objectives laid down in a deal with the International Monetary Fund (IMF), adding further fuel to its sky-high inflation amid nationwide protests over electricity bills.

The latest hike is the second one announced by the interim government of Prime Minister Anwaar-ul-Haq Kakar which came to power earlier this month.

Pakistan revises fuel prices every fortnight. In the latest announcement, the price of petrol has been increased by Rs14.91 to Rs305.36 a liter and diesel by Rs18.44 to Rs311.84, a notification issued by the Finance Division said. 

“Owing to the increasing trend of petroleum prices in the international market and exchange rate variations, the government has decided to revise the existing consumer prices of petroleum products,” the notification read.

The new prices took effect at 12am on Friday.

Pakistan secured a badly-needed $3 billion short-term financial package from the IMF in late June that helped it avoid default but came with tough conditions and fiscal reforms, including a petroleum levy of up to 50 rupees a liter, alongside a string of painful measures such as raising extra revenues, increasing energy prices and a market-based exchange rate, which has already fueled inflation.

The country’s Consumer Price Index rose to 28.3 percent in July, year-on-year, with prices up 3.5 percent in July from the previous month. In June, the CPI rise was 29.4 percent year-on-year, coming off a record 38 percent in May.

On Thursday, the Pakistani rupee plummeted to an 8th consecutive record closing low of Rs305.5 against the US dollar, Pakistani central bank data showed. The rupee has shed 4.6 percent of its value since the Kakar administration took control and lost 6.2 percent of its value through August. 


Pakistan, Qatar discuss Afghanistan situation, urge dialogue for regional stability

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Pakistan, Qatar discuss Afghanistan situation, urge dialogue for regional stability

  • The development comes amid renewed Islamabad-Kabul tensions after last week’s Pakistani airstrikes inside Afghanistan
  • Qatar, along with other states, helped mediate a ceasefire between the neighbors following weeklong skirmishes in Oct.

ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif and Qatar’s Deputy PM Sheikh Saoud Al-Thani on Tuesday discussed the situation in Afghanistan and called for dialogue to promote regional stability during high-level talks held in Doha, Sharif’s office said.

The development comes amid renewed tensions between Pakistan and Afghanistan after Islamabad conducted airstrikes on what it said were Tehreek-e-Taliban Pakistan (TTP) targets in Afghanistan last week. Kabul said the strikes killed civilians and vowed to respond to the violation of its sovereignty.

This is the second time in less than six months that Pakistan has conducted airstrikes in Afghanistan. The last strikes triggered heavy, weeklong clashes between the neighbors along their border before Qatar and Turkiye mediated a ceasefire between them in Oct. last year.

During their meeting in Doha, PM Sharif and Qatari Deputy PM Sheikh Saoud Al-Thani, who is also the state minister for defense affairs, discussed defense and security relations between the two countries, according to Sharif’s office.

“Regional developments were also discussed, in particular the situation in Iran and Afghanistan,” Sharif’s office said in a statement. “Both sides emphasized the importance of dialogue, de-escalation and collective efforts to promote peace and stability in the region.”

Sheikh Saoud appreciated the professionalism and expertise of the Pakistani armed forces and conveyed Qatar’s interest in deepening defense partnership between the two countries, according to the statement.

The Pakistan premier expressed satisfaction over the ongoing collaboration and underscored Islamabad’s commitment to further expanding defense collaboration.

Separately, Sharif held meetings with Qatar’s State Minister for Trade Dr. Ahmed bin Mohammed Al-Sayed and a delegation of the Qatar Businessmen Association (QBA).

During his meeting with the Qatari trade minister, the two sides reviewed bilateral trade and economic cooperation and expressed satisfaction over the growing momentum in Pakistan–Qatar relations.

“The Prime Minister emphasized the importance of enhancing bilateral trade volumes and diversifying Pakistan’s exports to Qatar, particularly in agricultural products, food items and value-added goods,” the Pakistani information ministry said.

Pakistan has been seeking closer economic engagement with Gulf partners amid its broader push to stabilize the economy and attract investment, while maintaining security and defense cooperation with key regional states.

Sharif highlighted Pakistan’s investment-friendly reforms and the role of the Special Investment Facilitation Council (SIFC) in facilitating foreign investment, according to the Pakistani information ministry.

Dr. Al-Sayed, who is also the chairman of Pak-Qatar joint business taskforce, reiterated Qatar’s interest in expanding economic cooperation and strengthening private-sector and business linkages between the two countries.

“The two sides also agreed to convene a meeting of the task force comprising relevant officials of both countries, within the month of Ramadan, to discuss concrete investment proposals for Qatari investment in Pakistan,” it added.

In his meeting with QBA delegates, Sharif highlighted Pakistan’s improving macroeconomic indicators and invited QBA members to explore opportunities in infrastructure, logistics, energy, agriculture, technology and export-oriented manufacturing.

Sharif is also scheduled to meet Qatar’s Emir Sheikh Tamim bin Hamad Al Thani and Qatar’s Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani in Doha today, Tuesday, to discuss ways to further strengthen bilateral relations, Sharif’s office said.

“Discussions will take place on further strengthening bilateral relations,” it added.