Govt once again increases prices of petrol, diesel by Rs30 per litre

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petroleum

Monitoring Desk

ISLAMABAD: The prices of petrol and diesel have once again been increased by Rs30 per litre each, with the change that already took effect from 12 midnight.
The increase in the prices of the utility was announced by Federal Finance Minister Miftah Ismail while addressing a presser in Islamabad Thursday evening.
The price of petrol, with the increase, is now set at Rs209.86 while that of diesel at Rs204.15.
The Pakistan Muslim-League (PML-N) senior leader at the same time announced that the government had not decided to increase the price of electricity as yet.
The finance minister observed that the prices of fuel have seen an increase internationally after May 31.
Ismail further stated that the government could understand that the decision will lead to more inflation but added that the hike was mandatory.
A day earlier, the International Monetary Fund (IMF) said that “Pakistan needs to take wide-ranging steps to repair macroeconomic stability”, indicating that the revival of the programme would not be a cakewalk despite the government’s decision to increase fuel prices by 25%.
Reacting to the further increase in the petroleum prices, former prime minister Imran Khan said that the hike would “increase the burden on the public by Rs900 billion”.
The PTI chief also wrote on his official Twitter handle: “Expect inflation by 30%” the highest in 75 years.
TLTP adds: Finance Minister Miftah Ismail broke good news on Thursday, saying that Chinese banks have agreed to refinance Pakistan with $2.3 billion worth of funds which will “shore up Pakistan’s foreign exchange reserves.”
Taking to his Twitter handle, Miftah tweeted: “Good news. The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about $2.3 billion) have been agreed.”
The finance minister added that inflow is expected “shortly” after some routine approvals from both sides, adding that this will help shore up the country’s foreign exchange reserves.
The news comes as a lifeline as the country is already facing an uncertain economic situation due to a delay in the revival of the stalled multibillion-dollar International Monetary Fund (IMF) programme. The development comes as a massive relief to economic policymakers that saw foreign exchange reserves held by the State Bank of Pakistan (SBP) fall to $10.09 billion, with the level staying at less than 1.5 months of import cover.
The agreement with Chinese banks is expected to bolster the reserves and enable the country to make import payments while lending some support to the rupee as well which has lost over 25% since the start of the outgoing fiscal year 2021-22.
The restoration of Pakistan’s delayed IMF programme rests on the government’s capacity to make fiscal adjustments of about 2.5 percent percent percent of the gross domestic product (GDP) by increasing revenues and reducing expenditures in the upcoming budget 2022-23.
Earlier on Saturday last, Miftah Ismail said that Pakistan is expected to reach an agreement with the IMF in June to resurrect an enhanced bailout package to support the cash-strapped country’s sagging economy. He said that the country is projected to need USD 36-37 billion in foreign financing in the next fiscal year.
Speaking at a webinar, Ismail revealed that at present the government was not considering raising fresh foreign debt from the global capital market and commercial banks after the country’s international bonds lost almost one-third of their value, while their yields went up significantly. He said that instead of economic growth, controlling inflation was the top priority of the government.
Meanwhile, Federal Minister for Finance and Revenue Miftah Ismail directed to expedite the process for import of edible oil from Malaysia and Indonesia to ensure smooth supply to the consumers and stabilise the price hike of edible oil.
While presiding over a meeting of the committee on edible oil availability on Thursday, the minister was informed that the price of edible oil is rising globally which would have a significant impact on the trade bill of Pakistan.
Federal Minister Rana Tanveer Hussain also gave a workable option to enhance local production of Canola oil seeds for import substitution and to ensure availability of the commodity in the wake of global pressure on supply chain.
He further directed that required steps should be undertaken to enhance the local production, so that its impact on foreign exchange reserves could be minimized.
Separately, Miftah Ismail emphasised Jewelers Association to play its due role in strengthening the national economy by enhancing the export of Jewelry.
The finance minister held a meeting with a delegation of All Pakistan Jewelers Association led by its president Mr. Shehzad Iqbal at the Finance Division, today. Chairman FBR and senior officers from Finance and Commerce Ministries attended the meeting.
The delegation gave an overview of the jewelry sector in Pakistan and its contribution in the economy. They also highlighted the issues being faced by the Jewelers community regarding taxation and sought government’s support to address their issues and provide relief in taxation. It was apprised that these issues are proving as a great hindrance in the development of this sector.
Miftah Ismail highlighted the commitment of the present government to provide a conducive and friendly environment to the business community in Pakistan. He acknowledged the contribution of the jewelry sector in the economic development and assured the delegation to provide maximum relief in taxation to this sector.
The delegation thanked the finance minister for addressing their issues and assured the finance minister about growth of this sector with cooperation of the present government.