Massive hike in petrol, electricity rates announced

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Petrol price increased to Rs209.86 per litre; Power tariff up by Rs7.91 per unit; Subsidies on cooking oil, ghee will continue

Finance Minister Miftah Ismail announced on Thursday that the price of petrol has been moved up by Rs30 to Rs209.86, a few days after increasing the rate of the commodity by the same amount.

Mifta Ismail, in a press conference, said Prime Minister Shehbaz Sharif has approved hiking the price of petrol, diesel, and light diesel by Rs30 per litre, while the rate of kerosene oil has been hiked by Rs26.38 per litre, effective from June 3.

“…kerosene oil is the only commodity which is not leading to losses for the government. However, we are facing losses of Rs8 on light diesel, Rs9 on petrol, and Rs23 on high-speed diesel,” he said.

The new price of petrol will be Rs209.86 per litre, diesel Rs204.15, light diesel Rs 178.31 and kerosene oil will cost Rs181.94 per litre.

The finance minister acknowledged that the lower-income segment of society would be affected the most as a result of the petrol price hike, but noted that the rate of oil has also sky-rocketed in the international market.

In response to a question, the finance minister said he was hopeful of reaching an agreement with the IMF in June, but noted that there were some reforms that the government still had to do. “The IMF wants to see our budget, so the reforms that we want to introduce will be introduced before the budget. However, we are speaking to the IMF on a daily basis,” he said.

He said the price hike was inevitable as he had to strike a deal with the international money lender as ex-finance minister Shaukat Tarin had “tied the government’s hands” due to the agreements he made with the IMF during his tenure. In a bid to ease the effect of inflation on the masses, the finance minister said the government would try its best to keep the price of sugar fixed at Rs70 per kg and wheat at Rs40 per kg at the utility stores. The finance minister said the government was giving subsidies of Rs100 on cooking oil and Rs15 on rice and pulses at the utility stores across the country. “The subsidies on cooking oil and ghee will continue for some time, but we will try to ensure to keep the rates of sugar and wheat fixed.” On the latest hike in electricity prices, the finance minister said he has “not seen” the National Electric Power Regulatory Authority’s report as of yet, but assured that the increase would not reflect on June’s bills. In response to a question, the finance minister said the previous government did not make substantial efforts to import oil from Russia — a much-touted claim that the PTI has been making. Ismail said when Khan concluded his Russia visit, no newspaper mentioned Islamabad’s deal with Moscow a day after that. “If there is a mention of it, let me know.” The finance minister added that ex-energy minister Hammad Azhar had written a letter to the Russian authorities about Pakistan’s willingness to import oil from Moscow.

“But they haven’t responded […] and we also contacted them through diplomatic channels, but they opted to not respond to our offer,” the finance minister noted.

However, he mentioned that the Russian authorities told Pakistan that the country did not complete the 2015 gas agreement. “So I cannot force the seller,” Ismail said. He noted that Pakistan will be willing to import cheap oil from Russia, provided that no sanction will be imposed