Finance Minister Ishaq Dar announced a Rs35 increase in petrol and diesel prices in a televised address on Sunday morning, just minutes before the new prices went into effect.
Dar announced the price increase in his speech, which began at 10:50 a.m. and ended 10 minutes later at 11:00 a.m.
He claimed that social media was rife with speculation about an Rs50 increase in petrol and diesel prices. “As a result of this, we have received reports of market artificial shortages.”
Fuel prices as of 11am, Jan 29:
- Petrol: Rs249.80 per litre
- High-speed diesel: Rs262.80 per litre
- Kerosene oil: Rs 189.83 per litre
- Light diesel oil: Rs187 per litre
“The Pakistani rupee was devalued last week […] and now we are seeing an 11% increase in the prices of petroleum products on the international market,” he explained.
The minister recalled that the price of gasoline had not been raised in the previous four months, from October to January 29. In fact, he continued, diesel and kerosene oil prices had been reduced.
“Despite international prices and rupee devaluation, on directions of Prime Minister Shehbaz Sharif, we have decided to increase the minimum price of these four products.
“We have decided to raise petrol and diesel prices by Rs35. “The price of kerosene and light diesel oil has been raised by Rs18,” Dar said, adding that the new prices would take effect at 11 a.m. today.
The minister also hoped that the announcement of new prices would dispel rumors that gasoline supplies were running low.
“This price increase is being implemented immediately on the recommendation of the oil and gas regulatory authority, who stated that there have been reports of artificial shortages and fuel hoarding in anticipation of price increases — thus this price increase is being implemented immediately to combat this.”
Commenting on the development, Fahad Raud, head of equities at Ismail Iqbal Securities, said that the petrol price hike was “in line with expectations”.
“This is only a partial increase because it excludes recent exchange rate depreciation. “More increases will be announced in mid-February,” he tweeted.
Petrol and Diesel price increased by Rs 35 per litre, in-line with expectations.
This is only a partial increase as it does not incorporate recent exchange rate depreciation.
More increase to come in mid feb#petrol #diesel #PetrolDieselPrice https://t.co/xsepxZj2Uh pic.twitter.com/FCEIKYHllu
— Fahad Rauf (@analystfahad) January 29, 2023
The decision came just days before an IMF mission is set to visit Pakistan later this month to discuss the country’s stalled ninth review of its current funding program.
Last week, the Pakistani rupee lost nearly 12% of its value following the removal of price caps imposed by the government but opposed by the IMF.
Pakistan is experiencing a balance of payments crisis, and the falling value of the Pakistani rupee will raise the cost of imported goods. Energy accounts for a sizable portion of Pakistan’s import bill.
A successful IMF visit is critical for Pakistan, which is facing an increasingly severe balance-of-payments crisis and is desperate for external financing, despite having less than three weeks’ worth of import cover in its foreign exchange reserves.
Masses ‘crushed’ by latest price hike
Meanwhile, PTI chairman and former prime minister Imran Khan criticized the petrol price hike, saying that the “total mismanagement” of the economy by the “imported government” has “crushed the masses and salaried class”.
“With Rs200bn mini-budget, electricity and gas price hikes and 35% unprecedented inflation are expected,” he tweeted.
Total mismanagement of our economy by a corrupt & incompetent imported govt has crushed masses & salaried class with latest hike in petrol & diesel prices & Rs33/$ devaluation to Rs262.6/$. Elec & gas price hike & 35% unprecedented inflation expected with Rs200bn mini budget.
— Imran Khan (@ImranKhanPTI) January 29, 2023
According to Asad Umar of the PTI, the public is already tired of inflation. “May Allah have mercy on these people and keep them from suffering,” he added.
پیٹرول اور ڈیزل 35 روپیہ مزید مہنگا. پہلے ہی تاریخ کی بدترین مہنگائی سے عوام پریشان. اللہ اس قوم پر رحم کرے اور اس عذاب سے نجات دلائے
— Asad Umar (@Asad_Umar) January 29, 2023
Former finance minister Shaukat Tarin predicted that fuel prices would rise again when the IMF mission visited Pakistan next week.
The PTI leader told Bol News that the rupee’s depreciation would affect the prices of all commodities.
“They haven’t even included tax in the new price. “However, taxes will be added,” he stated. “When the IMF [mission] arrives, you will see the government raise prices even more.”
Long queues at petrol pumps across the country
On Saturday, ahead of Dar’s announcement, rumors of a massive increase in petrol prices caused long lines at petrol pumps in many parts of the country.
According to social media reports, petrol and diesel prices are expected to rise by anywhere between Rs45 and Rs80 on February 1.
“We saw a report on social media that oil prices will rise due to the increase in the value of the dollar and international petroleum rates,” Hassan, who was queuing at a petrol pump, told Dawn.
Meanwhile, Geo News reported that petrol was only available at 20% of the pumps in Gujranwala, with severe shortages also reported in Rahim Yar Khan, Bahawalpur, Sialkot, and Faisalabad.