By Makhdoom
Shehryar Babar
ISLAMABAD: Continuing its selling momentum from the previous day, the stock market registered a decline of over 925 points on Friday, a day after the government raised fuel prices.
By 4:11pm, the KSE-100 index shed 925.80 points against the previous day’s close of 42,237.91 to fall to 41,312.11 — down 2.19 per cent. The benchmark index closed at 41,339.11 points, down by 898.8 points, or 2.13pc.
According to analysts, the bearish trend in the stock market Friday was a result of the government’s decision to increase the prices of petroleum products by another Rs30 per litre and its announcement to secure a determination from the power regulator of about Rs8 per unit increase in electricity rates for the next fiscal year.
The developments were announced by Finance Minister Miftah Ismail in a late-night press conference on Thursday in a bid to finalise a deal with the International Monetary Fund (IMF).
The rise in fuel prices and power tariffs via the removal of subsidies introduced by the PTI government is one of the main prerequisites that the incumbent coalition government needs to meet for the resumption of the $6 billion IMF programme, which
has been stalled since April. The PTI government had announced a four-month freeze (until June 30) on petrol and electricity prices on February 28 as part of a series of measures to bring relief to the public.
At the time, and even after coming into power last month, the PML-N and other parties part of the new coalition government had severely criticised Imran Khan’s government for “derailing” the IMF programme through unfunded fuel subsidies.
But despite being at the helm for over a month, these parties had not reversed the subsidies until May 26, when the government had raised the prices of petroleum products by Rs30 per litre after delaying the decision for long.
Thursday night, it raised the fuel prices by another Rs30, with Ismail saying that while the inevitable decision would increase inflation and create problems for people but the government could not let the country go bankrupt because of the wrong decisions of the previous government as international prices were going up.
