The International Monetary Fund (IMF) has stated that it is awaiting "necessary financing assurances" before the successful conclusion of review talks with Pakistan.
This has dampened expectations for a deal until Pakistan secures the remaining $3 billion of the total $6 billion loans it urgently requires to bridge the external financing gap. The government is striving to obtain commitments for the rest of the loans, including from foreign commercial banks, but negotiations may take several weeks.
The IMF has expressed concerns about Pakistan's economic policies, including the need for a positive inflation-adjusted interest rate. Prime Minister Shehbaz Sharif's recent announcement of petrol subsidies for motorcyclists and small car owners has further widened the trust deficit.
Pakistan's Finance Minister Ishaq Dar on Saturday announced an increase of Rs10 per litre in the price of petrol.
The decision has increased the petrol price from Rs272 per litre to Rs282 per litre.
Dar announced the increase in a late night live address to the nation. He said the prices of diesel and light diesel would remain unchanged at Rs293 and Rs174.68, respectively.
On Friday, Finance Minister Ishaq Dar had announced that the United Arab Emirates had given an assurance to the IMF for a $1 billion loan to Islamabad. Saudi Arabia had already made assurances for a $2 billion loan, according to Minister of State for Finance Dr Aisha Pasha.