Pakistan is scheduled to review price revision of petroleum products on February 15, 2023 amid steep fall in Pakistani Rupee (PKR) against the dollar during last fortnight.
Previously, the country sharply increased the prices of petroleum products on January 29, 2023, which was scheduled on January 31, 2023.
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The prices of petrol and high speed diesel (HSD) were increased by Rs35 per liter each and the rates of kerosene oil and light diesel oil (LDO) were increased by Rs18 per liter each.
The revised prices of petroleum products with effective from 11:00 AM January 29, 2023 were: petrol Rs249.80 per liter; high speed diesel Rs262.80 per liter; kerosene oil Rs189.83 per liter; and light speed diesel Rs187 per liter.
The prices were raised after the rupee crashed against the dollar on January 26, 2023 and continued its free fall. The local currency fell to the all-time low of PKR 276.58 to the greenback on February 03, 2023. However, the local unit made recovery to end at PKR 269.44 by end of trading at interbank foreign exchange on February 13, 2023.
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The local currency fell sharply after the government allowed market forces to determine the exchange rate. During past five months the government capped the dollar rates, which adversely affected the export earnings and inflows of remittances. On the other hand, the capping of the dollar resulted in a black market making huge different between rupee/dollar rate in interbank and unregulated markets.
The country is facing economic crisis like situation and negotiation a bailout package with the International Monetary Fund (IMF), which was stalled for the past many months.
Reportedly, the government is planning to introduce mini budget for generating additional as demanded by the IMF. Which may also include imposition of sales tax on petroleum products.
The IMF loan program under Extended Fund Facility (EFF) was stalled for the past many months and it derailed external position of the country.
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The final round of the talks with the IMF would be held on February 16, 2023, which if approved then it would pave way for $1.2 billion tranche for the country.
In order to comply with the IMF conditions the government has already announced phenomenal increase in gas prices. Further, changes such as mini budget and other measures are on the cards.
Experts believed that a storm of price hike is inevitable after the changes made by the government to comply with the IMF conditions.
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