By Asif Shahzad

ISLAMABAD Pakistan Finance Minister Ishaq Dar on Tuesday announced a big hike in petrol and diesel prices to reflect international market prices, in line with the objectives of an International Monetary Fund (IMF) bailout.

In a recorded video statement, he said petrol prices would be raised by 19.95 Pakistani rupees ($0.07) per litre and diesel by 19.90 rupees per litre.

The fuel prices increased sharply in the international market in the last 15 days, Dar said, adding his government had tried to minimise the hike.

He said the country was not in a position to deviate from the IMF's standby agreement finalised on June 30 after eight months of negotiations over fiscal discipline.

The major increase in petroleum prices will have political implications for Dar's coalition government just months away from a general election. The South Asian nation of 220 million people already has an inflation rate of more than 29%.

($1 = 286.6000 Pakistani rupees)

(Reporting by Asif Shahzad; Editing by Kim Coghill and Jamie Freed)