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Pakistan hikes Petrol / fuel prices; inflation likely to rise

ISLAMABAD, March 1 (Reuters) - Pakistan increased petrol prices by 9.9 percent on Tuesday, reflecting the global rise in oil, the state Oil and Gas Regulatory Authority (OGRA) said, in a move that could create fresh problems for the government.

A previous price hike in January was reversed days after implementation, when key coalition party the Muttahida Quami Movement (MQM) left the government in protest at the increase, a move that severely destabilised the coalition government led by President Asif Ali Zardari.

The increase on Tuesday saw the price of petrol raised to 80.19 rupees ($0.93) a litre from 72.96 rupees, the OGRA said in a statement.

Light diesel prices rose by 9.9 percent to 73.21 rupees a litre, an increase of 6.60 rupees.

The Consumer Price Index (CPI), a key reflection of inflation, rose 14.19 percent in January from the same time last year, and the rise in petrol prices is likely to increase inflation further.

Pakistan, which imports about 80 percent of its oil, spent $3.99 billion on the import of 6.9 million tones of petroleum products and $2.45 billion on 4.3 million tones of crude oil in the first seven months of the 2010/11 (July-June) financial year.

Pakistan linked its domestic fuel prices to global oil prices in 2008.

latest petrol / fuel rates after increase in pakistan

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