After increasing the prices of all petroleum products by Rs30, the government has also hiked up flour prices — by more than 20 per cent — at utility stores.

The new rates were conveyed to all zonal managers in a May 26 notification issued by the Utility Stores Corporation of Pakistan, a copy of which is available with Dawn.com.

According to the document, the sale price of a 20kg bag of flour at regular and franchised stores has been increased from Rs800 to Rs980. Similarly, the sale price of a 10kg bag of flour at regular and franchised stores has been increased from Rs400 to Rs490.

"Accounts officers are required to personally visit warehouses/stores to prepare price variation of atta and stock should be counted physically and report of stock should [be] sent to Wheat and What Flour section, Head Office," it stated.

"In case, any discrepancy/insufficiency is found at any stage, concerned officer will be held responsible," the notification added. It also said that the cost price of flour would remain the same.

Miftah concedes POL price hike would lead to inflation

The development comes as the government increased petroleum prices — the highest-ever increase in the prices in one go — in a move aimed at placating the International Monetary Fund for an economic bailout.

Speaking at a hurriedly called news conference last night, Finance Minister Miftah Ismail conceded the hike in POL (petroleum products) prices would increase inflation but the other route was to let the exchange rate deteriorate and this would have also increased inflation with other consequences as well.

He said the government took a considered decision to increase prices and would stand by it because the choice was between the political interest of the party and that of the state.

He also government was currently funding fuel prices to the extent of Rs120 billion out of the budget and the poor and the common man were subsidising the rich and industrialists to run luxury vehicles. As a result, consumption of petroleum products has increased by more than 20 per cent.

The minister also conceded that the IMF had refused to release another tranche without the withdrawal of fuel and electricity subsidies, but said discussions with the Fund were very positive and the latest decision would further lead towards positive outcomes. “I can assure you that hopefully we will achieve a staff-level agreement” with the IMF, he said without giving dates.