KARACHI: Pakistan has increased the price of petrol by 4.53 rupees ($0.016) to 293.94 rupees with effect from today, Tuesday, the finance ministry said in a statement, citing rising petroleum prices internationally.
The government also increased the price of high speed diesel by 8.14 rupees to 290.38 rupees, the post said.
The price hikes come as Pakistan has initiated discussions with the IMF over a new multi-billion-dollar loan agreement as its current nine-month, $3 billion loan program expires with the disbursement of a final $1.1 billion tranche likely to be approved later this month.
Reforms linked to that bailout, including an easing of import restrictions and a demand that subsidies be removed, fueled record inflation, with the rupee hitting all-time lows. Authorities also raised petrol and diesel prices to record highs to meet conditionalities.
“The prices of Petroleum products have seen an increasing trend in the international market during the last fortnight,” the finance ministry said as it announced the new prices.
“The Oil & Gas Regulatory Authority (OGRA) has worked out the consumer prices, based on the price variations in the international market.”
Under the last IMF bailout, Pakistan was told to prevent further accumulation of circular debt in its power sector, arising from subsidies and unpaid bills. For a new program, the South Asian nation will need to implement reforms to reduce costs by improving electricity transmission and distribution, moving captive power into the grid, improving governance, and combating theft.
It will also have to maintain power and gas tariffs at levels that ensure cost recovery, with adjustments made to safeguard the financially vulnerable, through existing progressive tariff structures.
In a report released in January, the IMF noted Pakistan missed its target for power sector arrears, largely due to lower-than-expected recoveries and tariffs.
