Nearly two months after the ouster of Prime Minister Imran Khan, Pakistan’s new government under Shehbaz Sharif announced the decision to roll back fuel subsidies, essentially increasing the fuel prices by a whooping 30 Pakistani rupees (around Rs. 12 INR). With this, the per litre price of the fuel crosses PKR 209 for petrol and PKR 204 for diesel.
The removal of subsidies is a part of the cash-strapped nation’s negotiations with the International Monetary Fund (IMF) for the resumption of the bailout programme. The IMF and Islamabad had reached a deal to release over $900 million in funds once Pakistan removed the fuel subsidies, said a Press Trust of India report, quoting a Pakistani source directly involved in talks in Qatar.
Pakistan Finance Minister Miftah Ismail said Thursday that there now remained a subsidy of about 9 Pakistani rupees per litre. Former PM Khan had given the subsidy in his last days in power to cool down public sentiment in the face of double-digit inflation, a move the IMF said deviated from the terms of the 2019 deal.
Meanwhile, Ismail said that Chinese banks have agreed to refinance Pakistan with $2.3 billion worth of funds which will “shore up Pakistan’s foreign exchange reserves.” “The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about USD 2.3 billion) have been agreed,” Finance Minister Miftah Ismail tweeted. “Inflow is expected shortly after some routine approvals from both sides. This will help shore up our foreign exchange reserves,” he added.
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Imran Khan’s politics
Khan, who has been demanding fresh elections for the past week, continued to put pressure on the ruling government, warning that Pakistan will “go towards [a] civil war” if elections were not announced.
The 69-year-old cricketer-turned-politician said in an interview that there needs to be a balance between having a strong army and a strong government, reported Pakistan-based Dawn.com.
“If the establishment doesn’t make the right decisions then I can assure in writing that [before everyone else] they and the army will be destroyed because what will become of the country if it goes bankrupt,” Khan said, reported Dawn. “Pakistan is going towards a default. If that happens then which institution will be [worst] hit? The army. After it is hit, what concession will be taken from us? Denuclearisation,” he said, adding: “If the right decisions aren’t made at this time then the country is going towards suicide.”
Reacting to this sharply, sitting Prime Minister Sharif accused Khan of “making naked threats against the country”.
While I am in Turkey inking agreements, Imran Niazi is making naked threats against the country. If at all any proof was needed that Niazi is unfit for public office, his latest interview suffices. Do your politics but don’t dare to cross limits & talk about division of Pakistan.
— Shehbaz Sharif (@CMShehbaz) June 2, 2022
“Do your politics but don’t dare to cross limits and talk about [the] division of Pakistan,” he cautioned PM Khan on Twitter.
