Petrol, diesel prices hiked massively

Islamabad: Finance Minister Ishaq Dar on Tuesday announced a massive Rs19 per litre increase in the price of petrol and diesel, which he said was done in the "national interest" as committed with the International Monetary Fund (IMF).

The revised prices have come into effect immediately.

The announcement was due on July 31, but the government did not issue new rates as the officials tried to maintain or reduce the rates — keeping in view the impact of the price hike on inflation-weary people.

Dar, who made the announcement as the finance minister for the last time as his government's term ends on August 12, said the increase was inevitable as Pakistan had agreed with the IMF on slapping petroleum development levy (PDL) to the rates.

"...we tried to either reduce or see what could be adjusted in its working. But we all know about our commitments with the IMF on the petroleum development levy," Dar mentioned.

The finance minister said the government, had it not been in an agreement with the IMF, would have reduced the PDL to provide relief to the masses.

Dar said he would not resort to moves that the previous government did as it decreased the petrol price and breached the commitments made with IMF.

The finance minister mentioned that the price of high-speed diesel had moved up significantly in the international market, resulting in the government's decision to hike local rates.

"Keeping in mind national interest, it is crucial that we pass on the minimum [amount] which has been calculated," the finance minister added.

The IMF has imposed stringent conditions to ensure that the $3 billion Standby Agreement continues smoothly. One of the requirements of the agreement is to raise the petroleum levy to Rs60 per litre.