Petrol and diesel prices are up respectively by PKR 17.50 and PKR 20, Finance Division said in its midnight announcement.
By Muhammad Ali
ISLAMABAD: Yet another flood of inflation is on its way as the government has jacked up pump prices for fossil fuels – hiked 8 percent a fortnight ago – again by up to over 7 percent.
The retail price of motor spirit or petrol has been hiked from PKR 272.95 to PKR 290.45, reflecting an increase of PKR 17.50 or about 6.4 percent, the Finance Division said in a midnight announcement.
The retail prices of high-speed diesel (HSD) has been hiked from PKR 273.40 to PKR 293.40, reflecting an increase of PKR 20.00 or about 7.3 percent.
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The Finance Division sought to justify the first such decision announced by the caretaker government saying, “Petroleum prices in the international market have increased during the last fortnight”.
The development is sure to unleash a renewed flood of inflation in the domestic economy as fossil fuel prices factor heavily into almost every item via transportation. It comes as a hard blow to the common Pakistani, already grunting under historic high economic hardship.
The move comes at a time when the central bank is maintaining the policy rate at a high level with a view to dampening inflationary expectations. Inflation clocked in at 28 percent in July, among the highest in Asia, according to official data.
The decision is in consonance with the policy direction set by former Prime Minister Shahbaz Sharif’s economy czar Ishaq Dar, both of whom signed off only the other day to pave the way for a caretaker governmnet charged with holding a free and fair general election.
The continuity of of Dar’s policy – settled in consultaiotn with the International Monetary Fund (IMF) as Pakistan signed up to a 9-month, USD 3 billion Stand-By Arrangement (SBA) a while back – was the big question mark as Sharif prepared to step down.
A government not committed to the policy direction could well jeopardise the SBA, pushing Pakistan into difficulties in external sector payments.
It today’s announcement is any indication, the caretaker government is committed to following the unpopular policy to the hilt – probably a good omen for the coutry’s macroeconomic health in the longer term but a dire prospect for the Pakistani consumer in the immediate term.
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