Islamabad [Pakistan]: Pakistan Prime Minister, Shehbaz Sharif on Thursday announced a reduction in the prices of petrol and diesel by Rs 18.50 and Rs 40.54 per litre as crude oil rates in the international market fell sharply.
Pakistan is in economic turmoil as its foreign debts are rising while foreign exchange reserves are depleting and the drastic situation raises concern over Pakistan’s economic challenges getting deeper. The government had increased the prices of petrol after coming into power as it had no other option due to a crunch in foreign currency reserves and high prices in global markets, The News International reported, quoting Shehbaz as saying.
The government, however now decided to reduce the price of petrol and diesel by Rs 18.50 and Rs 40.54 per litre due to the decline in prices in the international market
The new price of petrol will be Rs 230.24 per litre while diesel will be available at Rs 236 per litre.
Pakistan’s external debt servicing rose to USD 10.886 billion in the first three quarters of 2021-22 compared to USD 13.38 billion in the entire FY21.
The external debt servicing was just USD 1.653 billion in 1QFY22 against USD 3.51 billion in the first quarter of 2020-21. However, the debt servicing jumped to USD 4.357 billion in 2QFY22 and further to USD 4.875 billion in 3QFY22.
Pakistan has been facing a serious threat on the external front as the State Bank of Pakistan’s foreign exchange reserves fell to single digits despite a USD 2.3 billion inflow from China late last month.
The increasing size of the external debt servicing in each quarter indicates the government has been borrowing dollars at higher commercial rates to meet its foreign debt repayment obligations, reported Dawn.
The economic slowdown is taking a toll on Pakistan’s job market as some sectors reported layoffs.