ISLAMABAD: Finance Minister Ishaq Dar on Tuesday announced a cut in the price of petrol by Rs5 per liter to pass on a decline in global prices to inflation-hit consumers.
In a video message, the finance minister said the new petrol prices decreased will be now Rs267 per liter from the previous cost of Rs272.
He added that the price of high-speed diesel would remain unchanged at Rs280 per liter.
The drop in petrol price comes as a relief to consumers, but the government’s decision to keep diesel prices unchanged is likely to disappoint the country’s oil industry, which was expecting a reduction of over Rs20 a liter as the price of diesel has gone down in the international market.
The government is in a race against time to implement tax measures and reach an agreement with the International Monetary Fund (IMF) as the country’s reserves have depleted to around $3 billion, which experts believe is enough for only 16 or 17 days of imports.
The agreement with the IMF on the completion of the ninth review of a $7bn loan program would not only lead to a disbursement of $1.2 billion but also unlock inflows from friendly countries.
Prime Minister Shehbaz Sharif last week had also announced a slew of austerity measures, which he claimed would save the country Rs200 billion annually. Pakistan is in dire need of funds as it battles a worsening economic crisis.
Oil and Gas Regulatory Authority (OGRA) had proposed another hike in petrol prices decreased in Pakistan.
The media reports stated that the authority had sent a summary to the federal government in this regard. Quoting sources, the reports suggested that OGRA had sent two suggestions to the government.
Firstly, the authority has suggested 2% and 5% General Sales Tax (GST) on petrol and diesel, respectively, along with a 5-10% petroleum levy on diesel. If the government imposes 2% GST on petrol, its price will increase by Rs. 5.44/per liter. In case of 5% GST, the petrol will see a jump of Rs. 13.60/per liter from tomorrow.
According to sources, OGRA has also suggested maintaining the prices for next fortnight. The global fuel prices have come down in the last 15 days and currently stand at $74/barrel.
Secondly, OGRA has suggested imposing new taxes as per global market trends to keep the price unchanged. The final decision about fuel prices will be made after consultation with the finance minister and prime minister