AT a time when people were groaning under the pressure of record inflation in the history of the country and expected a reversal in the situation, the government itself has confirmed there would be no respite for the masses in the near future. The Finance Ministry on Friday forecast inflation to rise further due to a second-round effect of policy decisions made earlier to raise energy and fuel prices, the central bank’s policy rate and the rupee’s depreciation to secure money from the International Monetary Fund (IMF). It explained that inflation was expected to stay at an elevated level owing to market frictions caused by relative demand and supply gap of essential items, exchange rate depreciation and recent upward adjustment of administered prices of petrol and diesel.
It is now quite evident that people have been left at the mercy of circumstances as hands of the government are firmly tied due to ever-increasing demands of the IMF, which has started interfering grossly in all spheres of life, dictating terms every now and then and stopping the authorities from conceiving or implementing any plan to provide meaningful relief to the people. This is also confirmed by the regulatory approval the government got on Friday from the National Electric Power Regulatory Authority (NEPRA) for imposing up to Rs. 3.23 per unit surcharge on electricity consumers across the country with effect from July 01 for an indefinite period. This will be in addition to the so-called fuel adjustment and quarterly adjustment. The power tariff is already high and a further permanent levy of surcharge would mean more strain on family incomes besides its spiral effect on prices of goods and services. It is also unfortunate that the government is no longer willing to pass on the full impact of the reduced price of the oil in the international market to consumers in Pakistan. There were expectations that the prices of all petroleum products will be reduced in the wake of a significant drop in the oil prices in the international market but the government opted to maintain the prices of petrol and diesel and reduced kerosene and light diesel oil prices by Rs.10 a litre, which means no relief for any segment of the society as the last two products are not widely used. There are also indications that the SBP would announce a further hike in interest rate, dampening prospects for any worthwhile investment. With no silver lining on the horizon, frustration of the people would increase further in coming weeks and months.