ISLAMABAD: Prime Minister Shehbaz Sharif addressed the nation on Thursday evening and announced a reduction in petrol and diesel prices by Rs18.50 and Rs40.54 per liter respectively.
The announcement comes after the International Monetary Fund (IMF) on Thursday said it had reached a staff-level agreement with Pakistan that would pave the way for the disbursement of $1.17 billion, if approved by the IMF board.
The new government has in recent weeks withdrawn the unfunded subsidies that the previous prime minister, Imran Khan, gave to the oil and power sectors during his last days in office.
But in an address to the nation, Sharif announced a reduction in diesel and petrol prices.
"With a heavy heart, and due to rising oil prices in international markets, we increased prices due to which the poor got burdened. We had no other way, we had to take tough decisions,” Sharif said. “However, today with God's blessing, oil prices are declining in the global market and it is by His mercy that today we have got the chance to reduce the prices back.”
The IMF suspended its $6 billion bailout earlier this year after ex-PM Khan announced unfunded subsidies for the oil and power sectors. Khan’s government was ousted in April in a parliamentary vote of no-confidence.
The new government of Sharif has since raised the prices of petroleum products and electricity several times, pushing inflation to a 13-year high in June this year, which prompted the central bank to jack up key interest rates to 15%.
In a Twitter post on Thursday afternoon, however, Sharif said he hoped the IMF program would "set the stage to bring country out of economic difficulties."
Media widely reported on Thursday that the cut in petrol and diesel prices had been announced with the consent of the IMF.