As cash-strapped Pakistan desperately seeks loans to boost depleting forex reserves, the sources said that the change to the review process is a pre-condition of the International Monetary Fund (IMF) for the seventh and eighth reviews.
The change will come into place only after the federal cabinet’s approval, the sources said, as the government seeks to shift the advantage/burden of the change in international oil prices to the masses.
The price of petroleum products is currently reviewed after every 15 days and this decision was taken by PTI’s government. Before that, the rates were reviewed every 30 days.
The development comes after IMF’s Resident Representative for Pakistan Esther Perez Ruiz said that Pakistan has completed the last precondition — increasing the PDL (petroleum development levy) — for the combined seventh and eighth reviews.
The statement came as the government last week announced doubling the petroleum levy on petrol from Rs10 to Rs20 per litre and diesel from Rs5 to Rs10 per litre for the first half of August 2022.
Following the changes in the prices, petrol is now available for Rs227.19 per litre. Previously, petrol was being sold in the country for Rs230.34 per litre. The rate of high-speed diesel stands at Rs244.95 per litre.
An original $6 billion bailout package was signed by former prime minister Imran Khan in 2019, but repeatedly stalled when his government reneged on subsidy agreements and failed to significantly improve tax collection.
However, after several unpopular decisions, the Shehbaz Sharif-led government finally struck a staff-level agreement with the money lender last month.