Facing public and political ire, Pakistan government slashes petrol rates
The Pakistani government on Monday announced a major reduction in prices of petroleum products in the country with per-litre petrol price receiving a cut of Pakistani ₹10 (around ₹4). The move comes shortly after a significant hike which had pushed fuel prices to record highs in the country, a decision which had angered political rivals of the Imran Khan-led government and people at large.
Pakistan PM Khan announced in a televised address that prices of petrol are being cut in order to provide relief to the masses and despite climbing rates of crude oil in the global market. The country's government also slashed electricity rates by Pakistani ₹5 per unit and confirmed the new rates for electricity and petrol will remain till the next budget.
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The announcement was well-received by people in Pakistan even if the opposition parties pointed to pressure created on the government for the decision.
But while the cut in rates of petroleum products would indeed provide much-needed relief to masses - the previous hike was lambasted as a decision that would have created inflationary pressures - the rising crude prices in global market isn't expected to make things easy for Khan.
Last week, Brent oil surged to $100 a barrel for the first time since 2014. With the Russian invasion of Ukraine, the prices have been soaring and many economic experts fear that the rate could even touch a high of $125 per barrel. For countries depending on imports to meet with domestic need for fuel, this could mean massive pressure on finances.
Pakistan Energy Minister Hammad Azhar has said his country has a plan to ensure that the rate cut is feasible. "This will be achieved by reducing PDL (petroleum levy) in the short-term but by a funded subsidy in the long term," he said in a tweet.