(Reuters) – Petrol and diesel prices will rise by 12 rupees ($0.) this week, Pakistan’s finance ministry announced on Sunday. After the price cap, the country’s currency plummeted in value.
The decision comes days before an IMF mission will visit Pakistan later this month to discuss the ninth review of the country’s current stalled financing programme.
Last week, the Pakistani rupee depreciated nearly % after removing a price cap imposed by the government but opposed by the IMF.
Finance Minister Ishaq Dar told a news conference on Sunday that he hoped the announcement would dispel speculation on social media that prices would rise or gasoline supplies would dry up. He said the oil and gas authority had suggested a rate hike due to the higher cost of buying energy in the global market.
“We will have to take into account higher international oil prices and a weaker rupee,” he said.
“This increase is taking place immediately on the advice of the oil and gas regulator, which said there were reports of expected price increases leading to artificial shortages and hoarding of fuel – so prices are being raised immediately to Deal with the situation.”
The day before, Reuters witnesses reported long queues outside some gas stations amid speculation that prices would rise soon as residents filled up .
Pakistan is in balance of payments crisis and the plunging pakistan rupee will drive up the price of imported goods. Energy accounts for a large portion of Pakistan’s import bill.
A successful IMF visit is crucial for Pakistan, which is facing a growing balance of payments crisis and is desperate to secure external financing. Less than three weeks of imports have been held in foreign exchange reserves.
($1=12. Pakistani Rupee)
