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Pakistan Government Reduces Fuel Price Hike Amid Public Outcry and Pressure from MQM

Strategic Insights

— 1 min read

A 9.9% hike in petroleum prices has been reduced by half following a public outcry and pressure from the Mutahidda Qaumi Movement (MQM), an ally of the ruling Pakistan People's Party government. Federal Finance Minister Abdul Hafeez Shaikh announced the reduction after a meeting with MQM leaders on Thursday night. The decision comes as a result of the strike launched by Karachi Transporters United Front on Thursday, which was causing hardship to commuters, and the appeal of MQM Governor of Sindh Dr Ishrat-ul-Abad to end the strike.

Key Takeaways:

  • The government has agreed to reduce the 9.9% hike in petroleum prices by half following pressure from MQM and a public outcry across the country.
  • The decision was made after a meeting between Federal Finance Minister Abdul Hafeez Shaikh and MQM leaders on Thursday night.
  • Karachi Transporters United Front had launched a strike on Thursday, causing hardship to commuters, and MQM Governor of Sindh Dr Ishrat-ul-Abad appealed to end the strike.
  • MQM had sharply criticized the latest price increase and threatened to quit the coalition if the decision was not reviewed within three days.
  • The Pakistan government is under pressure from international lenders to implement unpopular economic reforms, including tax increases and ending subsidies.
  • The MQM disagrees with the People's Party on the subject, stating that Pakistani citizens cannot bear steep increases.
  • The MQM had left the government in protest the last time fuel prices were raised in January and only rejoined the coalition after the hike was reversed.

Statistics:

  • The 9.9% hike in petroleum prices has been reduced by half.
  • The Pakistan government is relying on a $11 billion bailout package from the International Monetary Fund.
  • A key condition of the next tranche of the seven-part loan is fiscal reform, including tax increases and ending subsidies.
  • The MQM is a key ally of the Pakistan People's Party government at the center and in Sindh province.

Sources:

  • Al Nisr Publishing LLC, 2011
  • Agencies (unspecified)

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