ISLAMABAD: The federal government has increased the petroleum prices by another Rs30 per liter, taking it to its highest-ever level, to meet an International Monetary Fund (IMF) condition for the revival of the EFF program.

Finance Minister Miftah Ismail on Thursday said at a press conference that the increase was necessary for the IMF program and other subsidies would also be withdrawn in the budget to be announced on June 10, 2022.

He also announced that the federal government has also decided to end the tax amnesty scheme announced by former PTI government. The scheme would not be extended. The finance minister did not rule out increase in electricity tariff and stated that he has not received any summary in this regard yet.

The new price of petrol, after the latest hike, will be at Rs209.86, diesel at Rs204.15, kerosene oil at Rs181.94 and light diesel at Rs178.31, he announced, adding that the new prices will come into effect from June 3, 2022.

The finance minister said that the government is still suffering a loss of around Rs9 in petrol despite a hike of Rs30 as we are not collecting any tax on fuel.

He observed that the prices of fuel have seen an increase internationally after May 31. The government could understand that the decision will lead to more inflation but added that the hike was inevitable.

He said that the government will reach an agreement with the IMF in June and we are engaged in negotiations with lender on a daily basis.

The IMF had demanded withdrawal of subsidies on petrol and electricity, he added.

Miftah said the government will have to end the subsidies announced by the last government; however, he claimed that the government will not impose any new tax in the next fiscal budget. The PTI government in its last days approved Rs42 billion DLTL but unfortunately, the last government did not issue any notification, otherwise, we were bound to release that money also.

He said the government will not increase tax on the salaried class in the next budget.

The finance minister said that Pakistan has also requested the IMF for an extension in the program and the lender is agreed as Pakistan will start repaying the IMF loan from next year so it is important to us to be in the program.

To a question, he said that the one month expenditure of the government is Rs40 billion.

He again reiterated that the government will not impose any new tax in June and the government of Pakistan cannot sell the petrol at a loss.

He said that China has agreed to refinance the loan at softer condition as compared to last time and now Pakistan would be paying 1.5 percent markup instead of 2.5 percent.

The federal government has slashed fuel subsidy on both petrol and high-speed diesel (HSD) and reverted its earlier decision to keep the prices of petroleum products unchanged for first half of June (June 1-15).

In another jolt to the masses, the government has decided to increase petrol and diesel prices by Rs30 per liter from June 3. This was announced by Finance Minister Miftah Ismail during press conference.

The subsidy on petrol was reduced from Rs39.32 per litre to Rs9.32 per litre and subsidy on HSD also slashed from Rs53.05 to Rs23.05 per litre.

The Oil and Gas Regulatory Authority (Ogra) has been asked to calculate the amount of Price Differential Claim (PDC) accordingly for disbursement to the respective OMCs/refineries under the procedure approved by the Economic Coordination Committee (ECC).

Meanwhile, sources said the decision was taken after a consultative meeting of the Petroleum Division with representatives of the Oil Marketing Companies (OMCs) and the Oil Companies Advisory Council (OCAC) which was held on Thursday.

The meeting was chaired by State Minister for Energy (Petroleum), Dr Musaddiq.