Finance Minister Ishaq Dar on Tuesday announced a significant increase of Rs. 19.9/liter to the prices of petrol and diesel, raising them to Rs. 272.95/liter and Rs. 273.40/liter, respectively.
In a brief press statement broadcast on all TV channels, he said the increase was motivated by a hike to the prices of high-speed diesel (HSD) and petrol in the international market over the past 15 days. Claiming the government had examined the valuation determined by the Oil and Gas Regulatory Authority (OGRA) overnight, he explained that this was why the fortnightly announcement was delayed by a day.
“The delay in the announcement, the basic reason was that we were looking at ways to reduce [the increase] … if there was some leeway,” he said, adding he had also discussed the situation with Prime Minister Shehbaz Sharif. “We all know the international commitments we have with the International Monetary Fund (IMF) regarding the petroleum levy,” he continued, adding that if these didn’t exist, the government would have announced a lower increase. However, he said, under the $3 billion standby arrangement with the global lender, the government had no choice but to pass on the full impact of the international prices. He stressed that he could not do what the previous government had done and renege on commitments to the IMF ahead of its exit from office.
“In the national interest, it is necessary that the minimum increase calculated be passed and HSD is being increased by Rs. 19.90/liter and the new price will be Rs. 273.40. And petrol price is being increased by Rs. 19.95/liter to Rs. 272.95,” he said, adding the new prices would be effective immediately.
Seeking to avert inevitable complaints over the massive hike, he claimed the government was determined to provide relief to the people, as evidenced by a recent reduction of Rs. 30/liter prices on diesel. “But international prices are not in the government’s control. And as I said, we did the working down to the last penny,” he claimed, reiterating that the tariff was increased on recommendations of OGRA and the approval of the prime minister.
Separately, OGRA has also announced a 17.5 percent increase to the producer price of liquefied petroleum gas (LPG), as well as a 13.5 percent hike to the LPG consumer sale price for August. In a notification, it said LPG price had been increased by Rs. 281.5/per cylinder, with the new producer price set at Rs. 1,886.30/11.8kg cylinder and the consumer price at Rs2,373.64/cylinder.