Sunday, January 29, 2023
Following the devaluation of the rupee against the dollar, Finance Minister Ishaq Dar Sunday announced that the price of petrol and diesel will go up by Rs35 per litre from today — effective 11am.
In a televised address, Dar also announced that the prices of kerosene oil and light diesel oil have been increased by Rs18 per litre.
The increase comes after the rupee hit a historic low against the dollar following the removal of the unofficial cap on the greenback.
Following the devaluation of the local currency, there was widespread speculation that the government may increase the prices by over Rs80.
Amid such rumours, people started rushing to petrol stations with the Oil & Gas Regulatory Authority (OGRA) advising people to stop spreading misleading and incorrect information.
|Increase/Decrease (in rupees)|
|Light diesel oil||Rs169||Rs187||+18|
The speculation was one of the reasons that the government had increased the prices of petroleum products immediately.
Dar shared that OGRA had requested Prime Minister Shehbaz Sharif and the government to implement the new rates on an immediate basis to prevent the temporary hoarding and the speculations about the shortage of petrol.
The minister admitted in the address that the speculations had led to artificial shortages in the market.
"We will have to keep in view the 11% increase in petroleum prices in the international market," he said.
Dar said that in the last four months, from October to January 29, the prices were not increased once. He added that in fact, petrol and diesel prices were decreased by Rs19 or Rs20 during this period.
He said that the kerosene oil and light diesel oil were decreased Rs29 and Rs30.
"Despite the rupee devaluation and the increase in international prices, it was determined that a minimum price would be increased on the directions of PM Shehbaz," said Dar. He hoped that the immediate decision would dismiss the rumours about the shortage of petrol.
In response, Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan condemned the "mismanagement" of the economy by the "corrupt and incompetent imported government" that has rushed the masses with the latest price hike.
"Total mismanagement of our economy by a corrupt & incompetent imported govt has crushed masses and salaried class with latest hike in petrol and diesel prices and Rs33/$ devaluation to Rs262.6/$. Electricity & gas price hike & 35% unprecedented inflation expected with Rs200bn mini budget," said Khan.
President of the Central Organisation of Traders of Pakistan Kashif Chaudhry rejected the Rs35 hike in the petrol and diesel prices, saying that the increase in prices will give rise to inflation.
Chaudhry urged the government to immediately withdraw the increase in the prices.
Pakistan is in the midst of a balance of payments crisis and the plummeting value of the Pakistani rupee will push up the price of imported goods. Energy comprises a large part of Pakistan's import bill.
A successful International Monetary Fund (IMF) visit is critical for Pakistan, which is facing an increasingly acute balance of payments crisis and is desperate to secure external financing, with less than three weeks' worth of import cover in its foreign exchange reserves.
Meanwhile, OGRA officials said that action would be taken against those who have shut down petrol pumps in some cities. The officials said that the licenses of those closing the pumps would be suspended.
The regulator is getting help from the district administration through the provincial chief secretaries in this matter, said the officials. They added that this matter would be resolved soon.
The day before the rise, some petrol stations had long lines outside as residents filled their tanks due to speculation that prices would soon rise.