Pak PM rolls back fuel price hike under pressure

Giving in to pressure from the main opposition PML-N, Pakistan's beleaguered government has rolled back an unpopular hike in fuel prices that had already resulted in one party leaving the ruling coalition.       

Following a meeting with leaders of all political parties, Prime Minister Yousuf Raza Gilani announced yesterday that the decision to reverse the fuel price hike in the National Assembly or lower house of parliament.

"While respecting the opinions of the entire leadership and the House and in view of the demand of the public, I announce that prices of petroleum products now stand reverted to the position of October 31 (last year)," Gilani said.

The government's move comes just two days after PML-N chief Nawaz Sharif demanded that the fuel price hike announced on New Year's Eve should be immediately rolled back.

The Muttahida Qaumi Movement (MQM), which was the second largest party in the Pakistan People's Party-led coalition, withdrew support to the government after fuel prices were increased by about nine per cent.

The MQM's decision to quit the alliance reduced the government to a minority in parliament and triggered fears that Gilani might have to face a trust vote.

Gilani called on all political parties to nominate representatives for a proposed parliamentary panel that will frame a strategy to cope with fluctuating oil prices on the global market.

The government is expected to be unpopular with the International Monetary Fund and Western donors who have been pressing it to cut spending and subsidies.

The government has hiked fuel prices and gas and power tariffs several times in the past year to meet conditions imposed by the IMF as part of a bailout package.

The moves have sparked anger across the country, with people complaining that the hikes have added to problems brought on by economic woes like rampaging inflation.

Gilani told parliament that the government had been unable to address the fuel price issue earlier due to the assassination of Punjab Governor Salmaan Taseer on Tuesday.

Leader of Opposition and senior PML-N Chaudhary Nisar Ali Khan welcomed the decision to roll back the fuel prices.

Earlier in the day, the government mooted a proposal to reduce prices of petroleum products by Rs 1.50 to Rs 2 but this was rejected by the PML-N and MQM, which called for a total rollback.

The meeting of all political parties was convened after overwhelming pressure from the opposition.

Observers said the government's decision to give in to the opposition would embolden the PML-N to press for the fulfilment of its other demands, including a probe into several corruption scandals and the implementation of court decisions that go against PPP leaders.