According to Pakistan’s Finance Minister, Shaukat Tarin, the new hike in petrol prices is unrelated to the country’s negotiations with the International Monetary Fund (IMF) on the reinstatement of a loan facility.
In a news conference held at the Pakistani Embassy in Washington, D.C. on Friday evening, Mr. Tarin stated that “a significant spike in petrol prices on the international markets obliged the government to take this measure.”
The Finance Division in Islamabad issued a statement on Saturday informing the public of the new petroleum rates. The notification confirmed the finance minister’s reasoning concerning a sharp increase in worldwide markets, noting that oil prices had risen to an unprecedented level of $85 a barrel at the time of the notification.
Mr. Tarin categorically denied that Pakistan was inflating oil and energy prices in order to appease the International Monetary Fund. “Inflation will rise, and our industry will become uncompetitive,” he warned, adding that the government recognized the dangers of increasing tariffs without making structural adjustments.
The minister, on the other hand, acknowledged that Pakistan needed to understand the IMF’s point of view on the matter and that he had held “some technical discussions” with them on the subject. “As a result, we will increase these tariffs in a steady manner so that inflation does not climb significantly,” he explained.
While the International Monetary Fund approved a 39-month agreement under the Extended Fund Facility for Pakistan in July 2019, with a total value of $6 billion to support Islamabad’s economic reform agenda, it is not issuing any further installments as of this writing.
During his visit to Washington, the finance minister attended a series of meetings with officials from the International Monetary Fund (IMF) to discuss the possibility of resuming the loan facility. Mr. Tarin has relocated to New York, leaving the finance secretary in charge of continuing discussions with the International Monetary Fund.