US opposed to Pakistan fuel price hike switch

WASHINGTON (AFP) – US Secretary of State Hillary Clinton said Thursday it was a "mistake" for Pakistan to reverse controversial fuel price hikes as it undermined its efforts to bolster its ailing economy.

"We believe that the government of Pakistan must reform its economic laws and regulations, including those that affect fuel and its cost," Clinton told reporters.
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"We have made it clear... that we think it is a mistake to reverse the progress that was being made to provide a stronger economic base and we will continue to express that opinion," the chief US diplomat said.

She said she had made the point when she met Pakistan's ambassador to Washington, Hussain Haqqani, at the State Department on Tuesday.

Mark Toner, a State Department spokesman, had earlier signaled US opposition to the fuel price hikes.

"What we've said all along is that the reforms that the government of Pakistan is undertaking are difficult, but they're important for its long-term economic stability," Toner told reporters.

"Our position is that... Pakistan needs to undertake difficult economic reforms that are going to require some pain, frankly, politically," Toner said.

In Islamabad, Pakistan's beleaguered prime minister Yousuf Raza Gilani on Thursday caved into political pressure and reversed fuel price hikes, in a move designed to prevent his fragile government from collapsing.

Rolling back the six-day-old kerosene, diesel and fuel price increases of between nine and 5.6 percent was one clause in a package of 11 reforms demanded by main opposition leader Nawaz Sharif in a 72-hour ultimatum on Tuesday.

Sharif later extended the ultimatum, which threatened to expel the ruling party from government in Punjab province, to begin after three days of mourning for liberal Pakistani politician Salman Taseer, who was shot dead the same day.