As soon as the National Electric Power Regulatory Authority (NEPRA) announced the monumental increase of Rs.7.91 per unit, totaling the price of each unit to Rs.24.82, the government announced a hike in the prices of petroleum products by as much as Rs.30. This was inevitable as the International Monetary Fund (IMF) is pending and the government must take all the measures needed to secure it. We can expect one final increase in fuel prices before stability ensues.
With this increase in fuel prices, and electricity, across the country, inflation is expected to skyrocket and backlash is expected from the people. Prices of basic commodities have risen to the point that they have become unaffordable by the masses and fuel supply remains limited. The government has stated that it would be open to importing cheap fuel from Russia, provided that there are no sanctions that accompany the trade deal. Regardless, the government needs to plan strategies that would reduce the burden on the people.
According to Finance Minister Miftah Ismail, the government is still facing a loss when it comes to petroleum. We are operating at a Rs9 loss despite the Rs30 hike, signaling towards the fact that there is still a degree of relief that is being provided to the people as the government is still not collecting the complete tax that should be imposed upon fuel. However, the IMF deal is the only solution for such fiscal problems but despite the increase in prices, we are yet to fulfil the remaining prerequisites for securing the deal.
The government has already made the hard decisions that were needed to set us on the right path. Now, focus should be on taking it a step further for the last time so that national anxieties can be reduced and policies can be designed in accordance with a price system that is more stable. In the meanwhile, we must focus on trade and eliminating losses so that the value of the rupee remains respectable and does not fall rapidly.
With this increase in fuel prices, and electricity, across the country, inflation is expected to skyrocket and backlash is expected from the people. Prices of basic commodities have risen to the point that they have become unaffordable by the masses and fuel supply remains limited. The government has stated that it would be open to importing cheap fuel from Russia, provided that there are no sanctions that accompany the trade deal. Regardless, the government needs to plan strategies that would reduce the burden on the people.
According to Finance Minister Miftah Ismail, the government is still facing a loss when it comes to petroleum. We are operating at a Rs9 loss despite the Rs30 hike, signaling towards the fact that there is still a degree of relief that is being provided to the people as the government is still not collecting the complete tax that should be imposed upon fuel. However, the IMF deal is the only solution for such fiscal problems but despite the increase in prices, we are yet to fulfil the remaining prerequisites for securing the deal.
The government has already made the hard decisions that were needed to set us on the right path. Now, focus should be on taking it a step further for the last time so that national anxieties can be reduced and policies can be designed in accordance with a price system that is more stable. In the meanwhile, we must focus on trade and eliminating losses so that the value of the rupee remains respectable and does not fall rapidly.
