Petrol price impact

BEING the first petroleum pricing after the government decided to replace the Petroleum Development Levy with the carbon tax, there was a lot of nervous speculation as to how it was going to pan out. That angst did not prove to be unfounded. The government has increase the petrol price by Rs 6.20, diesel by Rs 6 and kerosene by Rs 7.50. One really can't blame the carbon tax itself for this jump. Even if the PDL regime had continued, the quantum increase could have very well brought on by a cash-strapped government.
Adviser to the Prime Minister on Petroleum Dr Asim Hussain conceded that this is going to hurt the industrial sector. The 10 percent drop in industrial gas surcharges is not, by any stretch, going to compensate for that. The recent increase in prices is also going to fuel higher inflation, nullifying the seemingly correct direction inflation figures were taking. The IMF's insistence on our tax-to-GDP ratio being suitably high shouldn't be handled in the myopic manner military governments handle things; the system of direct taxes should be made far better rather than taxing those who have already been taxed. If the increase emanates from the impulse to generate more revenue, then the government should realise where to stop. If revenue is to be generated to spend on the betterment of the people, the government should not want to sound like the doctor who insists that the operation was successful even though the patient died.