Citizens in Pakistan will pay PKR 272 per litre for petrol, while an equal quantity of diesel will cost PKR 280 after a fresh hike in fuel prices.
The increase in fuel prices will inflict more pain on the already-burdened citizens of the South Asian nation that is facing its worst economic crisis in history.
The announcement about the hike comes just a few hours after the Shehbaz Sharif government tabled a supplementary finance bill in the Pakistan National Assembly. The government has proposed to hike goods and services tax to 18 per cent – a move aimed at raising PKR 170 billion in revenue to tackle the ongoing economic crisis.
Local media outlet GEO TV reported that petrol prices have gone up by PKR 22.20, while diesel has been hiked by around PKR 17. In addition, kerosene oil has also become costlier and will retail at PKR 202.73 per litre. The new prices will come into effect from 12 am on Thursday.
The hike in oil prices was expected as it was among the conditions set by the International Monetary Fund for releasing crucial monetary aid. However, this will trigger a further spike in inflation in the nation where even basic commodities are now retailing at extremely high prices.
For instance, a litre of milk in the crisis-hit nation is retailing at PKR 210, while a kilo of chicken costs PKR 700-800. Prices of other essential items such as wheat, pulses and vegetables also remain high.
Given the situation, Moody’s predicts inflation to remain high in Pakistan for at least the first half of 2023 before moderating. However, the country may need much more than an IMF bailout package to bring its economy back on track.