Artificial shortage

The recent surge in petrol and diesel prices in Pakistan, driv­en by global oil price increases, has strained the government’s re­sources and exposed its inability to subsidise or absorb the hike. This issue is further compound­ed by Pakistan’s need for a larger IMF bailout.

The rising fuel costs have led to increased prices for goods and services, including transportation and agricultural produce, poten­tially causing inflation and unrest. The government’s failure to im­pose taxes on the wealthy has lim­ited its fiscal capacity, burdening ordinary Pakistanis with inflation.

This inflation disrupts the cen­tral bank’s monetary policy, po­tentially pushing interest rates into negative territory. Interna­tional oil prices show no sign of decreasing, raising concerns about another price hike on Octo­ber 1, which could further impact economic growth.

To address these challenges, the government should consider in­novative solutions such as target­ed subsidies for bikers and rick­shaws, measures to reduce fuel demand, and possible carpooling requirements. Swift action is cru­cial to mitigating the impending economic challenges.



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