Islamabad: Giving into pressure from the
main opposition PML-N, Pakistan`s beleaguered government today
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 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
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
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
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.