The Pakistan Democratic Movement (PDM)-led government has announced an increase in petrol price In Pakistan just hours after releasing a ‘mini-budget’ aimed at helping people suffering from inflation. Petrol price will rise to a historical high of Rs272 per liter for the next fortnight, following an increase of Rs22.20 per liter. A press release from the Finance Division explained that the increase was due to the devaluation of the Pakistani rupee against the US dollar.
The decision was made to comply with one of the conditions the International Monetary Fund (IMF) set. However, this will lead to an even higher inflation rate, which is already at a record high, as noted by Senior Economist Katrina Ell of Moody’s Analytics. She predicts that inflation in Pakistan could average 33% in the first half of 2023, despite the IMF’s bailout, which may not be enough to fix the economy.
Latest Petrol Price In Pakistan
| Product | Existing prices w.e.f 29/1/2023 | New prices w.e.f 16/2/2023 | Increase |
| Petrol | 249.80 | 272 | 22.20 |
| High speel diesel | 262.80 | 280 | 17.20 |
| Kerosene | 189.83 | 202.73 | 12.90 |
| Light diesel oil | 187 | 196.86 | 9.68 |
The PDM-led federal government’s ‘mini-budget’ aims to reduce the budget deficit and increase tax collection. The Federal Board of Revenue (FBR) has issued an SRO to raise the standard general sales tax (GST) from 17% to 18%, which is expected to generate Rs115 billion. The remaining Rs55 billion will come from other measures outlined in the Finance (Supplementary) Bill 2023.
In summary, the Pakistani government has increased petrol prices to comply with an IMF condition, despite the already high inflation rate. The government is also introducing measures to reduce the budget deficit and increase tax collection through the ‘mini-budget.’
The increase in petrol prices is expected to add to the burden of the people already struggling with inflation. The PDM-led government has been facing criticism from opposition parties and the public for their inability to control the rising prices of essential commodities.
Several opposition parties have announced protests and rallies in response to the increase in petrol prices. The Pakistan Muslim League-Nawaz (PML-N) has called for a countrywide strike, while the Pakistan Peoples Party (PPP) has announced a protest in Islamabad.
The PDM-led government has defended the increase in petrol prices, stating that it was necessary to meet the IMF’s conditions and stabilize the economy. The government has also emphasized the importance of the ‘mini-budget’ in reducing the budget deficit and increasing tax collection.
However, the increase in Petroleum Products is likely to have a ripple effect on the economy, leading to an increase in the prices of other essential commodities. It could further worsen the already high inflation rate and lead to an increase in poverty and unemployment.
In conclusion, increasing petrol prices by the PDM-led government is necessary to meet the IMF’s conditions and stabilize the economy. However, it is likely to add to the burden of the people already struggling with inflation and could lead to protests and rallies by opposition parties. The success of the ‘mini-budget’ in reducing the budget deficit and increasing tax collection remains to be seen.
