Pakistan hikes fuel prices; inflation likely to increase
ISLAMABAD, April 1
ISLAMABAD, April 1 (Reuters) - Pakistan increased fuel prices by up to 13 percent, reflecting the rise in global crude oil prices, the Oil and Gas Regulatory Authority (OGRA) said on Friday, in a move that could create fresh problems for the fragile government.
The coalition led by President Asif Ali Zardari halved the increase in petroleum prices last month to mollify a key partner which quit the government in protest over the last fuel price hike in January.
That increase was reversed altogether to woo the Muttahida Qaumi Movement, the third-biggest party in the coalition.
The latest move announced late on Thursday saw the price of petrol (gasoline) raised to 83.56 rupees ($0.98) a litre from 76.58 rupees, up 9.1 percent, and light speed diesel to 78.98 a litre from 69.91 rupees, up 12.97 percent, the OGRA said in a statement.
International benchmark Brent crude for May LCOc1 was at $117.16 a barrel on Friday, after hitting the highest close the previous day since August 2008 and up 23.9 percent for the first quarter.
The Consumer Price Index (CPI), a key reflection of inflation, rose 12.91 percent in February from the same time, and the rise in petrol prices is likely to increase inflation further.
Pakistan, which imports about 80 percent of its oil, spent $3.99 billion on the import of 6.9 million tones of petroleum products and $2.45 billion on 4.3 million tones of crude oil in the first seven months of the 2010/11 (July-June) financial year.
Pakistan linked its domestic fuel prices to global oil prices in 2008.
($=85.30) (Reporting by Zeeshan Haider; Editing by Augustine Anthony and Ramthan Hussain)