TRUE to its commitments, the Federal Government offered massive relief to consumers at the first available opportunity after signing of the historic Iran-US peace accord as it reduced price of petrol by Rs. 74 a litre and that of diesel by Rs. 67 a litre on Friday in a move widely hailed by all segments of the society. In a statement, Prime Minister Shehbaz Sharif said in view of the improvement in the regional economic situation and the decline in oil prices, the benefit is being immediately passed on to the public. In a related development, the PM has approved termination of all ‘fuel conservation and additional austerity measures’ notified by the Cabinet Division from time to time since March 9, except for market timings specified in notifications of June 3 and 10, which shall remain applicable.
There can be no denying the fact that the war in the neighbourhood presented enormous challenges to the country but it is also a fact that people of Pakistan bore the brunt of the conflict as the government instantly raised the price of fuel by Rs. 55 a litre on start of the war and jacked up the prices to a pinnacle of Rs. 458.4 per litre, putting enormous burden on the common man. It was in this backdrop that the Prime Minister acknowledged that the government fully understood the difficulties faced by the people, who had shown remarkable patience and resilience during these challenging times. He also pointed out that the federal government utilized Rs129 billion, saved through development budget adjustments and austerity measures, to provide relief to people across the country and cushion them from the sharp rise in fuel prices. However, no one knows for sure the real benefits of these measures as transporters increased fares and transportation charges immensely and manufacturers jacked up prices of their products even disproportionately taking advantage of the uncertain and fluid situation and weak governance. This is also confirmed by short-term inflation, measured by the Sensitive Price Index (SPI), which increased by 15.28 per cent year-on-year for the week ending June 20. The year-on-year increase was largely driven by sharp gains in key items, including petrol (44.73%), diesel (44.39%), electricity charges (59.40%), wheat flour (58.72%), and liquefied petroleum gas (52.66%).
The government surely deserves appreciation for transferring relief in the prices of oil in the international market to domestic consumers but more important is the challenge to ensure a proportionate reduction in the prices of goods, services and transport fares. We have all along been warning the government that prices once increased are not reverted back to the original level despite normalization of the situation and this trend was observed repeatedly in the past. People of Pakistan are witnessing the worst type of price-hike these days and after reduction in oil prices it now depends on the efficiency and administrative skills of the federal and provincial governments to ensure that the relief is passed on to the end consumer and not pocketed by transporters, manufacturers and service providers. Similarly, there are clear indications that the prices of oil in the global market are set to decrease further and might drop to pre-war levels in coming weeks. Therefore, the decision taken on Friday should not mean one off relief and future reductions in oil prices should also benefit people of Pakistan. The government should realize that lower or affordable prices of petroleum products contribute a lot in boosting commercial and economic opportunities and have a salutary impact on the electricity tariff, which is closely linked to fuel prices. It is also time that instead of taking refuge behind foul tactics of concealing details of electricity tariff (as the government has done by opting to a new format of electricity bills), the government should dispense with exploitative elements of the tariff. The end of the conservation measures is understandable on normalization of the situation and hopefully the government will persist with its decision to retain market timings, which is in line with practices in other countries.
