ISLAMABAD – The federal government is likely to increase the petroleumprices by Rs20 per litre from September 1.

According to the local media, the government will jack up the petrol pricesin an attempt to revive the stalled $6 billion IMF bailout package.

As per the letter of intent (LoI) the government sent to the IMF, it hadwritten that a sales tax has been imposed on petroleum products.

In order to fulfil the pre-requisites of the IMF, the federal government islikely to abolish the sales tax exemptions on petroleum products for theagricultural sector from September 1, the sources added.

The government has already removed subsidies from petroleum products inline with an IMF agreement, triggering a wave of inflation.

On August 17, Finance Minister Miftah Ismail confirmed that the governmenthas sent the letter of intent (LoI) back to the IMF after fulfilling thepre-requisites, paving the way for the executive board’s meeting.

In his conversation with journalists, the finance minister said that thedocument — received on August 12 — was sent to the lender after his andState Bank of Pakistan (SBP) Acting Governor Murtaza Syed’s signatures.