Pakistan hikes petroleum prices up to 50.71% in a week

Pakistan hikes petroleum prices up to 50.71% in a week

ISLAMABAD: The Pakistan government led by a coalition government has sharply increased petroleum prices by up to 50.71 per cent in just one week.

Finance Minister Miftah Ismail on Thursday made second announcement in just span of one week to increase the prices of petroleum products around Rs30 per liter each time.

READ MORE: New petroleum prices in Pakistan from June 03, 2022

The new petroleum prices per liter effective from June 03, 2022 are:

DescriptionPrice on May 26, 2022Price on June 03, 2022DifferencePercent increase
High Speed DieselRs144.15Rs204.15Rs6041.62%
Kerosene oilRs129.56Rs181.94Rs52.3845%
Light Speed DieselRs118.31Rs178.31Rs6050.71%

A statement issued by the finance division on Thursday stated that crude oil and petroleum prices are increasing substantially in the international market.

READ MORE: Petroleum prices in Pakistan from June 01, 2022

Maintaining POL prices at the hugely subsidized rates results in increasing both budget deficit and imports.

The subsidized rates of these POL products also poses supply chain risk, the finance division said.

The current fiscal position and market prices leave no option for the government but to increase the prices. Therefore, the government has decided to increase the prices of petroleum products with effect from June 03, 2022 keeping petroleum levy and sales tax at zero per cent.

READ MORE: Pakistan increases petroleum prices by Rs30 per liter

“We note that the government is still losing money on petrol, high speed diesel and light diesel oil,” the finance division added.

The previous PTI government in February 2022 decided to freeze the prices of petroleum products at the level mentioned above in the table on May 26, 2022 up to June 30, 2022. However, former Prime Minister Imran Khan was removed from the office through a no-confidence motion on April 10, 2022.

READ MORE: Govt. decides to continue subsidy on petroleum prices

Since then, the new coalition government also maintained the prices till May 26, 2022. But under pressure of International Monetary Fund (IMF) for the release of next tranche of around $1 billion the government had no option but to increase the prices.

Analysts said that the significant hike in prices of petroleum products would bring a storm of inflation as POL prices are directly linked to all the prices of essential and non-essential items.

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