The caretaker administration on Tuesday raised the cost of petrol by Rs17.50 per litre, bringing it to a record high of Rs290.45. The price of petrol has reached an all-time high in the history of the nation, accelerating inflation.
govt increases petrol price: In addition, the cost of high-speed diesel was raised by 20 rupees per litre. High speed diesel would now cost Rs. 293.40 per litre after the increase.
The new prices went into effect after this announcement at 12 a.m. (the night of August 15–16).
After caretaker prime minister Anwaarul Haq Kakar, who took the oath of office on Monday, granted approval, the Ministry of Finance (MoF) declared the elevated pricing late at night.
In this regard, the finance division claimed that prices for the two major fuels had increased as a result of an increase in petroleum prices on the global market over the previous two weeks.
Kerosene and light diesel oil prices, however, remained unchanged.
Given the arrangement Pakistan has with the International Monetary Fund (IMF), which makes it hard for Islamabad to deviate from the requirements set by the top financial institution in the world, the action shouldn’t come as a surprise.
“IMF Managing Director Stresses Structural Reforms for Pakistan Following Agreement”
IMF Managing Director Kristalina Georgieva emphasised that Pakistan would need to quicken structural reforms shortly after the two parties signed the agreement.
She praised the coalition government for passing the budget for 2023–24, calling it a positive step towards fiscal stabilisation. However, she also called for increased tax collection, which she argued was essential to bolstering the public sector’s finances and eventually generating the fiscal space required to increase social and development spending.
She also advocated for cutting back on government spending and making reforms to the energy industry through measures like raising prices and changing the subsidy system.
In order to ensure budget execution within the anticipated envelope, it will be crucial to maintain control over non-critical primary expenditure. The government must also immediately improve the viability of the energy sector by properly directing power subsidies, restructuring the sector’s cost structure, and matching pricing with expenses.
“As a result, the former prime minister, Shehbaz Sharif, repeatedly informed the public that the $3 billion agreement with the IMF had been negotiated solely due to the challenging circumstances and was not a choice made by them.”
But why did it happen? The strict requirements imposed by the largest financial institution in the world result in greater rate increases, higher gas and electricity prices, fewer subsidies, and ultimately more burden for the average person.