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Pakistani PM withdraws oil price hike to avoid crisis

0 CommentsPrint E-mail Xinhua, January 7, 2011
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Pakistani Prime Minister Yousuf Raza Gilani Thursday announced to reverse the fuel price hike after a key partner decided to quit the ruling coalition and the main opposition set a 6-day deadline for the withdrawal of the decision.

The key coalition partner Mutahida Qaumi Movement (MQM) or United National Movement decided Sunday to part ways with the government of Prime Minister Gilani, citing an increase in the petroleum prices as one of the main reasons.

The MQM decision had reduced the government parliamentary majority to minority and the prime minister had been under pressure to prove majority in the parliament.

On Tuesday, main opposition party Pakistan Muslim League-N chief Nawaz Sharif also called for the withdrawal of increase in the petroleum prices in six days.

In order to avoid political crisis, Gilani announced the hike withdrawal in the petroleum prices.

The prime minister invited leaders of all political parties in the parliament and told them that the fuel prices had been increased as oil prices had been raised at international market.

Economic experts say that now the government will have to give up to three billion rupees (35 million U.S. dollars) subsidies on fuel, which will also put a burden on budget deficit.

The transporters, who had increased fares, also announced to withdraw hike after the government's decision.

The opposition party of former Prime Minister Nawaz Sharif, welcomed the withdrawal of the petroleum prices.

The government's decision may to some extent ease the tensions it faces but some observers believe that it may be a temporary relief for Gilani.

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