Hike in petroleum prices

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THE coalition government has finally started taking politically tough decisions in order to avert financial losses.

On Thursday, Finance Minister Miftah Ismail announced to increase the prices of petroleum products by Rs 30 per litre just a week after making a similar increase.

After the latest round of hike, the petrol has been priced at Rs 209.86, diesel at 204.15, kerosene oil at Rs 181.94 and light diesel at Rs 171.31.

There is no denying that this is a massive increase which will have a direct and very adverse impact on the people already bitten hard by the price hike but it was inevitable given the soaring prices of petroleum products in the international market.

Such is the economic condition of the country that it cannot afford granting subsidy on fuel for a long time.

Where does the country stands today can be gauged from Moody’s Investor Service recent rating which has downgraded Pakistan’s outlook from stable to negative, citing heightened external vulnerability and uncertainty around securing external financing to meet the country’s needs.

Hence, the government is left with no option but to take difficult decisions to take the economy in the right direction and save it from default.

As was expected the opposition parties have strongly condemned the hike in prices of petroleum products with former Prime Minister Imran Khan calling on the people to come out on the street against the government’s anti-people policies and Chief of Jamaat-e-Islami Sirajul Haq announcing to begin a public movement from 11 June against the price hike.

We have repeatedly been saying in these columns that there should not be any politics on the economy.

In fact had there been government of any other party, it would also have to resort to such measures.

The PTI leaders should recall how many times the prices of petroleum products were increased when they were in power.

The politics of playing with the sentiments of the people must come to an end if we really want to take forward the country.

We understand that the massive increase in petroleum products will definitely trigger another wave of inflation in the country.

Apart from increase in prices in electricity, the transportation cost will immediately go up and resultantly the prices of all items will also soar.

In such times, the government must also come up with plans to protect the most vulnerable segments of the society.

Subsidy should be given on items such as sugar, floor, ghee/oil and pulses through the Utility Stores Corporation (USC).

Since the inflation will hit hard the salaried class, their salaries should also be enhanced accordingly.

Most importantly, if the petroleum prices continue to rise in the international market, the government should also look at out- -of-box solutions such as reducing the margins of refineries and arranging discounted oil from Russia.

 

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