The government increased the prices of petrol and high speed diesel (HSD) by Rs4 per litre, according to a statement issued by the Finance Division late on Friday.

The statement said the new prices will be effective from January 1 (Saturday).

"In the fortnightly review of petroleum products prices, Prime Minister [Imran Khan] has rejected the proposal of Ogra (Oil and Gas Regulatory Authority) for an increase in prices of petroleum products and advised to increase only Rs4 per litre to meet the petroleum levy target agreed with the IMF (International Monetary Fund)," the statement read.

The Rs4 increase in the price of petrol is part of a commitment made by the government under an agreement with the IMF for a net fiscal adjustment of almost Rs550 billion during the remaining part of the current fiscal year.

Making an announcement in this regard, Finance Minister Shaukat Tarin had said during a press conference in November that a Rs4 per litre monthly hike in petroleum levy on major petroleum products would be made as part of an austerity plan for the revival of $6 billion IMF package.

The Rs4 increase announced on New Year's Eve is the first instance of the monthly raise announced by Tarin.

Following this development, the price of petrol has been increased from Rs140.82 to Rs144.82, that of HSD from Rs137.62 to Rs141.62, of kerosene from Rs109.53 to Rs113.53 and that of light diesel oil from Rs107.06 to Rs111.06, according to the Finance Division's statement.

The statement said sales tax on petrol and diesel had been adjusted downwards as compared to December 16, 2021, to keep the prices lower.

On December 15, 2021, the government had slashed the prices of petrol and high speed diesel by Rs5 per litre in an effort to provide relief to the people.