ISLAMABAD – Pakistan's government has hiked fuel prices by up to 6.45 percent, as the country continues to face widening fiscal and current account deficits amid spiralling inflation.
On Monday, countrywide fuel prices increased to Rs98.89 ($0.70) per litre, with diesel prices at Rs117.43 ($0.83), a government notification said, hitting nine-month highs.
Pakistan subsidises the price of most fuels in the country, but has been cutting those payments in recent months as the newly elected Pakistan Tehreek-e-Insaf (PTI) government struggles to contain ballooning government expenditure amid an overall economic slowdown.
In the past six months, the country has received at least $8 billion in grants and loans from Saudi Arabia, the United Arab Emirates and key strategic and economic partner China, with whom Pakistan is embarking on the $56bn China Pakistan Economic Corridor (CPEC) project.
The influxes have helped stave off a looming foreign reserve crisis, with central bank reserves back up to $8.56bn, or just over two months of imports, according to a central bank statement released on Thursday.
Last week, the International Monetary Fund’s Pakistan mission chief Ernesto Ramirez Rigo held two days of meetings with Pakistani Finance Minister Asad Umar, central bank officials and others ahead of an expected IMF bailout.
The bailout, which both Pakistani PM Imran Khan and IMF chief Christine Lagarde alluded to after a meeting in February, would be Pakistan’s 13th IMF programme since 1980. (FA)
