Pakistan increases petrol, diesel prices by 17% to control fiscal deficit

This will be the second time in a week Pakistan will slash the fuel subsidies in a bid to control the fiscal deficit and secure International Monetary Fund bailout money.

Pakistan increased petrol and diesel prices for consumers by 17 per cent at the pumps starting on Friday, finance minister Miftah Ismail announced. Both being raised 30 Pakistani rupees each per litre.

An attendant fills a vehicle with gasoline at a Shell Petroleum Ltd. gas station in Rawalpindi, Pakistan, (Bloomberg)

This is the second time in a week Pakistan will slash the fuel subsidies in a bid to control the fiscal deficit and secure International Monetary Fund bailout money.

Ismail said there remained a subsidy of about 9 Pakistani rupees per litre, reported news agency Reuters.

The Dawn reported that after the latest round of hike, petrol will be priced at 209.86 PKR, diesel at 204.15 PKR, kerosene oil at 181.94 PKR and light diesel at 178.31 PKR. Only kerosene oil's price was hiked by less than 30 PKR.

On May 27, the Pakistan government increased the rate of petroleum products by 30 PKR per litre, or up to one-fourth of their existing prices.

The move is expected to help defuse the landmines laid by the government of former prime minister Imran Khan on the one hand, and will save the country from looming default on the other.

Ismail said the government was holding talks with the IMF on a daily basis, adding "we cannot accept all their demands but there are certain points that we have to agree to."

Ismail, however, said the government would ensure stability in prices of sugar and wheat at 70 PKR per kg and 40 PKR per kg respectively at utility stores countrywide.