Pakistan hikes petrol price by 22.20 rupees a litre

Pakistan has hiked the price of petrol by 22.20 rupees ($0.0835) a litre to 272 rupees ($1.02) effective on Thursday because of the plummeting value of the country's currency, the finance ministry said in a statement.

The Pakistani rupee has fallen sharply against the dollar since an artificial cap on the local currency was removed last month to allow its value to be decided by a market-based exchange rate.

The South Asian country is locked in negotiations with the International Monetary Fund (IMF) for the release of critical bailout funds, and with roughly enough reserves to meet only three weeks of imports, Pakistan is looking to increase revenue despite multi-decade high inflation of 27 per cent.

Pakistan laid a supplementary finance bill before parliament on Wednesday, proposing to raise the goods and services tax (GST) to 18 per cent from 17 per cent to help raise 170 billion rupees ($639.70 million) in extra revenue during the fiscal year ending in July.

The finance bill also proposed to raise taxes on luxury items to 25 per cent, while hikes in taxes on first- and business-class air travel, cigarettes and sugary drinks were also proposed.

High speed diesel will now cost 280 rupees a litre after an increase of 17.20 rupees, the finance ministry said. Kerosene and light diesel oil prices were increased as well.