The federal government has finally taken a tough decision to increase the petroleum prices by Rs30 per litre, Finance Minister Miftah Ismail announced.

New prices will be effective from midnight (today), he added

The development came a day after Pakistan and the International Monetary Fund (IMF) failed to reach a staff-level agreement for the revival of the $6 billion programme.

In a handout, the IMF on Wednesday emphasised upon “urgency of concrete policy actions, including removing fuel and energy subsidies”.

Addressing a press conference in Islamabad on Thursday, Miftah said it has become indispensable to shift the fuel price hike burden on the masses as the IMF had refused to give “any relief” until the fuel subsidy was removed.

“It was a difficult decision for us to impose any kind of burden on the people,” he remarked.

“It was a difficult decision for us to impose any kind of burden on the people,” he said, adding that Prime Minister Shehbaz Sharif will address the nation to take them into confidence over the increase.

Miftah said the government has decided to increase the petrol, diesel and kerosene oil prices by Rs30 per litre.

Following the increase, petrol will be sold at Rs179.86 per litre, while the price of high-speed diesel (HSD) will jump to Rs174.15 per litre and kerosene oil will be increased to Rs155.56 per litre.

Also read: Govt committed to reviving the IMF programme, says Miftah

The finance minister also expressed hope that the fuel prices will come down with the appreciation of the rupee value against the US dollar.

“The decision will harm our political capital but for us [government] the country and economy is more important,” he added.

Miftah also criticised former prime minister Imran Khan for freezing the petrol prices for political gains.

Islamabad and the IMF have worked out the outlines for the release of over $900 million in funds that would come through once fuel subsidies are removed, a Pakistani source directly involved in talks in Qatar told Reuters requesting anonymity.

The talks in Qatar’s capital Doha on the resumption of a funding programme concluded on Wednesday.

“When we raise fuel prices, the deal will be done. We have worked out the outlines of a deal,” the source told Reuters in a text message after the end of the talks in Doha.

The IMF representative in Pakistan did not immediately respond to a Reuters request for comment.

Pakistan entered a three-year, $6 billion IMF deal in 2019, but about half of the funds are yet to be released.

A pending tranche of over $900 million dollars is contingent on a successful IMF review. A successful review would also unlock other funding avenues for cash-strapped Pakistan, whose foreign reserves cover less than two months’ worth of imports.

(With input from Reuters).

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