The Ministry of Finance, late on Tuesday, notified a record-high increase to prices of petrol and diesel, within days of the caretaker government assuming power, raising fears of further inflation in the weeks ahead of general elections.
According to the Finance Ministry’s notification, the price of petrol has been increased by Rs. 17.5/liter from Rs. 272.95 to Rs. 290.45/liter. At the same time, the price of diesel—primarily used in the transport sector—has climbed by Rs. 20/liter from Rs. 273.4 to Rs. 293.4/liter.
Local media reported the ministry had announced the revised prices for the next fortnight after securing the approval of caretaker Prime Minister Anwaarul Haq Kakar, who was sworn into office on Monday. The newly-appointed premier has yet to pick his cabinet, including a finance minister, seen as key to managing the economy and ensuring continuity of policies required to maintain prior conditions committed with the International Monetary Fund (IMF).
The Finance Ministry’s notification stressed that the prices of petrol and diesel were being increased because petroleum prices had increased in the international market over the past two weeks. It did not mention any change to the prices of kerosene and light diesel oil. Observers note the tariff hike is also likely linked to a recent devaluation of the rupee against the U.S. dollar, as it had earlier stabilized following the inking of a $3 billion stand-by arrangement with the IMF.
This is the second consecutive jump in fuel prices over the past two weeks, with the outgoing government similarly notifying a Rs. 19.9/liter increase to the prices of both petrol and diesel on Aug. 1. It is also the highest the prices of petrol and diesel have ever been in Pakistan. The last highest price of high-speed diesel was Rs. 293/liter in March, while petrol had previously peaked at Rs. 282/liter in April.