Move comes soon after govt unveiled “mini-budget” aimed at meeting the IMF’s requirements
Hours after unveiling a ‘mini-budget’ for the inflation-hit people, the Pakistan Democratic Movement (PDM)-led government Wednesday announced an increase in the price of petrol for the next fortnight, taking the rate to a historic Rs272 per litre.
The price of petrol has been moved up to Rs272 per litre after an increase of Rs22.20, a press release from the Finance Division read Wednesday night, noting that the surge has taken place due to the rupee’s devaluation against the dollar.
The price of high-speed diesel has been increased to Rs280 per litre after a hike of Rs17.20. Kerosene oil will now be available at Rs202.73 per litre following a Rs12.90 hike. Meanwhile, light diesel oil will be available at Rs196.68 per litre after an increase of Rs9.68.
The new prices will come into effect from 12am tonight.
|Product||Existing prices w.e.f 29/1/2023||New prices w.e.f 16/2/2023||Increase|
|High speel diesel||262.80||280||17.20|
|Light diesel oil||187||196.86||9.68|
The increase in the price of petroleum products was one of the preconditions of the Washington-based lender, which will lead to a hike in the already record-high inflation, coupled with the new fiscal measures undertaken through the ‘mini-budget’.
Senior economist Katrina Ell, associated with Moody’s Analytics, had predicted that inflation in Pakistan could average 33% in the first half of 2023 before trending lower, and a bailout from the IMF alone is unlikely to put the economy back on track.
Through the “mini-budget”, the Pakistan Democratic Movement (PDM)-led federal government aims to reduce the budget deficit and broaden its tax collection net.
The Federal Board of Revenue (FBR) has issued an SRO, increasing the standard 17% general sales tax (GST) to 18%, for collecting taxes worth Rs115 billion, while the remaining Rs55 billion will be generated through other measures in connection with the Finance (Supplementary) Bill 2023 — or the ‘mini-budget’.