The caretaker government announced its latest fiscal measure; increasing the prices of petrol and high-speed diesel by Rs.26.02 and Rs.17.34 respectively, causing alarm across the country. This effectively means that the average cost of petrol is now at Rs.330 per litre. The public was already up in arms about the exorbitantly high fuel costs; now, backlash will be immense. The government may be making decisions keeping in line with global trends but it must brace itself for staunch opposition against such hikes.
In the month of August alone, Pakistan reported a 27.4% increase in the rate of inflation. High electricity bills had agitated the public, businesses and traders alike as they protested against these unsympathetic decisions for weeks. Beyond this, the average cost of living has jumped dramatically with many unable to afford three meals a day. Add to this the economic woes of the industrial and business sector which is barely recovering its cost of production. Ultimately, they pass their costs onto the end consumer as well. All in all, the quality of life of an average Pakistani is declining by the minute.
In the face of all this, raising fuel prices by Rs.27 seems unreasonable. To be fair, we must remain cognizant of the fact that this hike is incurred by rising fuel prices across the globe. The government may be recovering losses accumulated through unsustainable subsidies over the course of generations but that has little to no bearing on this specific price increase.
The price of gasoline has jumped sky high because of low inventories and high demand across the globe. Supply has failed to recover from historically low levels despite the addition of refining capacity in the Middle East and China. Beyond this, the Organisation of the Petroleum Exporting Countries (OPEC+) has reduced oil production by 2 million barrels a day. The objective seems to be increasing prices in the long term but cutting down on supply. Add to this Russia’s invasion of Ukraine that brought forth sanctions which limited its exporting capacity. Oil prices were expected to increase keeping these events in mind.
It is unfortunate that the impact of such global trends is so dire in Pakistan. At this time, the government must be sympathetic to the people and lend an ear to their grievances, which are abundant. At the same time, it is absolutely essential that we explore cheaper supply streams because frequent increases are proving to be devastating for the masses.