Pakistan government reverses fuel hikes

The Pakistani government said Thursday it would reverse unpopular fuel price hikes that helped spark the breakup of the governing coalition, the Associated Press reported.

The announcement came a day after the funeral for assassinated Punjab governor and outspoken liberal Salman Taseer, and seemed a last-ditch attempt to prevent the government from collapsing at a time of growing turmoil in the country.

For the Pakistan People's Party (PPP), already reeling from the defection of a key coalition partner this week, the killing of Taseer — a key party member — by his own bodyguard Tuesday dealt another unsettling blow.

Taseer's brutal killing in public in an upscale Islamabad neighborhood is seen as revenge for his outspoken opposition to the country's strict blasphemy laws.

His bodyguard, Malik Mumtaz Hussain Qadri, 26, who is charged with murder and terrorism after firing 27 bullets into Taseer, told officials during his first court statement Wednesday he was proud of the murder and saw it as his religious duty.

Highlighting the strength of conservative religious sentiment in the country, supporters of Qadri showered him with rose petals and garlands at his court appearance, while even moderate religious leaders refused to condemn the assassination, and some hard-line religious leaders appeared to condone the attack.

It is unclear whether the government's decision on fuel prices, which were increased up to 9 percent on New Year's eve, will lure back the second-largest member of the ruling coalition, the Muttahida Qaumi Movement (MQM).

The MQM said anger over the price hikes spurred its defection to the opposition, which deprived the PPP of a majority coalition in parliament, plunging the country into political turmoil.

The decision to back down on the fuel price hikes could cause problems with the International Monetary Fund, which has demanded that Pakistan reduce its deficit if it wants to continue receiving billions of dollars in loans that have helped keep its faltering economy afloat.