Ishaq Dar announces 35-rupee hike in prices of petrol and diesel

Finance Minister Ishaq Dar announced on Sunday a Rs35 increase in the prices of petrol and diesel, which will be applicable from 11am today, Aaj News reported.

In a video address, the finance minister said: “Speculation was rife on social media regarding a Rs50 increase in the prices of petrol and diesel. Because of this, we received reports of artificial shortages in the market.”

Dar hoped the announcement would dispel speculation of a higher price hike or that petrol supplies would run dry.

After the hike, petrol will be priced at Rs249.80. High Speed Diesel will be priced at Rs262.80 per litre.

The prices of Kerosene oil and light diesel oil have been increased by Rs18, Dar said, adding that the new prices will come into effect at 11am today.

Kerosene Oil will now be priced at Rs189.83 per litre, while light diesel oil will cost Rs187 per litre.

He said the hike was recommended due to the higher cost of buying energy in the global market.

“We will have to take the rise in international oil prices and the rupee into account,” he said.

Earlier, the Oil and Gas Regulatory Authority (OGRA) strongly rebutted speculations on petrol/diesel shortages.

Pakistan was expected to announce an increase in petroleum prices in order to meet part of prior conditions set by the International Monetary Fund (IMF) to revive a desperately-needed bailout programme.

The price hike comes as Pakistan’s rupee underwent significant depreciation against the US dollar, plunging over 12% across just two sessions on Thursday and Friday.

The rupee closed at 262.6 in the inter-bank market on Friday.

PM Shehbaz hopeful of IMF programme revival

Prime Minister Shehbaz Sharif on Friday said he was hopeful that the crucial IMF programme would resume “this month”, a statement that comes after the lender confirmed its mission will arrive in Islamabad at the end of January.

The IMF has said its mission will visit Pakistan from January 31-February 9 to continue discussions for the 9th review under the Extended Fund Facility (EFF).

This was confirmed by IMF Resident Representative Esther Perez Ruiz to Business Recorder on Thursday, a day when the rupee also plunged nearly 10% against the US dollar in the inter-bank market. The next day, the rupee depreciated another 2.7%.

The IMF official stated that the mission will focus on policies to restore domestic and external sustainability, including strengthening the fiscal position with durable and high-quality measures while supporting the vulnerable and those affected by the floods; restore the viability of the power sector and reverse the continued accumulation of circular debt; and reestablish the proper functioning of the forex market, allowing the exchange rate to clear the FX shortage.

Pakistan is desperately looking to convince the lender to resume its bailout as foreign exchange reserves held by the State Bank of Pakistan (SBP) dropped a massive $923 million to a mere $3.7 billion, data released on Thursday showed.

This is the lowest level of SBP-held reserves since February 2014.

FBR readies presentation for IMF

The Federal Board of Revenue (FBR) on Saturday also briefed the Ministry of Finance on estimates of tax projections for January-June (2022-23) and the revenue impact of the new taxation measures of nearly Rs300 billion.

According to sources, the FBR has drafted a presentation for the International Monetary Fund (IMF) on revenue position and new tax measures under the proposed Ordinance.

FBR Chairman Asim Ahmad and relevant FBR members attended the meeting at the FBR House and discussed proposed revenue measures under the mini-budget.

Business Recorder earlier reported that the FBR has drafted proposals of new taxation measures of nearly Rs300 billion to be enforced through the promulgation of the Tax Laws Amendments Ordinance, 2023.