And now, a gas price increase

With high petrol prices, and a recent tariff increase in electricity, the price of gas had now gone up as well.

Tanzeel Gillani August 09, 2011

With ordinary Pakistanis already suffering from the burden of high food prices during Ramazan, high petrol prices, and a recent tariff increase in electricity, it must have come as a shock to many that the price of gas had now gone up as well. And it wasn’t by a minuscule amount but by the rather hefty proportion of 13.5 per cent. This is applicable on all domestic, commercial and industrial users.

One wonders why all such rises and decisions have to be taken when the nation is celebrating a holy month and is set to gear up for the Eid festival.

Being residents of a democratic state, one is left with little choice but to take this increase in stride, given that the government has a majority in parliament and speaks, in theory at least, with a voice given to it by the people’s mandate.

The effect of this on, say, CNG users is that henceforth, the price of the fuel has increased by six rupees per kilo which amounts to a difference of around Rs35-40 if one were fill up the tank. This is a large increase and is bound to play havoc with most CNG buyers, the majority of whom purchase it for their vehicles. Again, one has to wonder whether the government carried out any kind of cost-benefit analysis before approving this significant price hike. Was a survey done on how it would affect people’s spending, especially those from middle- and low-income backgrounds?

Of course, apart from this, if the price of CNG rises, since it is a fuel and is also widely used as an input in various industries, increasing its cost is likely to cause a round of inflation. Also, the cost of transport will rise, which also is an input since it is factored into the prices of goods and commodities sold at the retail level.

To make matters worse, the price increase for gas comes at a time when there is a significant shortage of the commodity, leading to its loadshedding in large parts of the country. The situation has also led to CNG stations being closed for two to three days every week in some parts.

Tanzeel Gillani A journalist affiliated with the Express Media Group
The views expressed by the writer and the reader comments do not necassarily reflect the views and policies of the Express Tribune.


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