Petrol Price Increasing in Pakistan

Petrol Price Increasing in Pakistan

Pakistan massively increases petroleum prices effective from February 16

By Pak Chronicle Web Desk

Islamabad

What others was foreseeing as inevitable, became a reality on Wednesday when the government announced a massive increase in petroleum products effective from today (February 16, 2023).

This move is apparently taken to fulfill the program of the International Monetary Fund (IMF) to get its financial assistance to avoid default.

The government increased the prices up to Rs22.20 per liter in petroleum products.

The petrol price is increasing in Pakistan and now the petrol rate has been increased by Rs22.20 to Rs272 per liter from Rs249.80. The High Speed Diesel (HSD) price has been increased by Rs17.20 per liter to Rs280 per liter from Rs262.80.

The rate of Kerosene oil, which is mostly used in rural areas, has been enhanced by Rs12.90 to Rs202.73 per liter from Rs189.83.

The price of light diesel oil (LDO) has been increased by Rs9.68 to Rs196.68 from Rs187.

While stating reasons behind this massive surge in petroleum products, the Finance Division maintained that an increase in prices was made due to Pakistani rupee devaluation against the US dollar, stated a few media outlets.

However, apart from the reason cited by the Finance Division, the increase in petroleum products was inevitable to get a much needed bailout package from the IMF to get out of the ongoing financial crisis.

The local currency started its free fall journey even during the period of Pakistan Teheek-e-Insaaf (PTI) which had lasted till April 9, 2022 from 2018.

However, it witnessed massive decline against the US dollar during the era of the current regime as well and there was a time when there had seemed no end to this phenomenon.

It fell to the all-time low of Rs276.58 to the US dollar on February 03, 2023. However, the local unit made recovery to end at Rs269.44 by end of trading at interbank foreign exchange on February 13, 2023.

Before the sharp decline of the local currency, actually it was the government which was holding up the local currency’s exchange rate against the greenback.

However, it started sharply declining against the greenback when the federal government allowed the market forces to determine the exchange rate.

The country is facing an economic crisis situation and negotiating a bailout package with the IMF which is still under way.

To fulfill the demand of the IMF, the government introduced a mini budget in the National Assembly on Wednesday in which extraordinary taxes were levied on the masses. There has been little news about curbing government’s own non-developmental expenditures and they are what they used to be before the current economic situation.

As the present and the previous regimes were not in position to make tax recovery up to the mark, the easiest formula to increase its recovery is to increase the prices of the petroleum products. Increase in the petroleum products bring immediate financial gains for the government in which no hard work of government functionaries are required.

The increase in petroleum products would further increase the inflation level in the country which is already touching record high levels even in the region.

The prices of essential commodities would go beyond the reach of the common citizens as the result of this move.

Ends

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