Rise and rise of fuel prices

It is the season for relatives to meet and greet one another, driving across town for rendezvous that only happen on an annual basis but with full excitement. The government has taken away some of this excitement, however, by increasing fuel price by Rs4.26. Somewhat obligated to do so following a drastic rupee depreciation, the timing is most unfortunate.

Eid has been made more difficult for majority of the population because while Muslim countries will be more in tune with the lunar Islamic calendar in the next week, the global economy continues to operate on the Gregorian calendar. Hence, the Pakistani government raised prices just before Eid to align with the beginning of the new month. Holiday travellers have been forced to reconsider their plans, especially those travelling far across the country to visit remote villages for Eid.

Still, the situation could have been more costly. Ogra recommended a price hike double of what it is currently, initially suggesting a 7.8% increase or Rs8.5 per litre. Other types of fuel such as diesel also experienced price hikes but not at the rate originally recommended by Ogra. Owed to the rupee’s devaluation, a price hike was inevitable. Opposition parties lambasting PM Khan are merely acting as opportunists to take a swipe at the PTI whenever possible. For Shehbaz Sharif to term this ‘economic terrorism’ is dramatic and harmful to the progress of the country.

Nevertheless, while the price increase is a fraction of what was recommended, we could expect a further rise in prices later on, possibly after a mild decrease, as per the usual pattern. Further rupee devaluation can also be expected, according to analysts. The overall reductions in prices of crude oil may or may not prove relevant in lowering the fuel prices offered to Pakistani citizens. A logical solution to solving people’s problems with being unable to afford high fuel prices is to revamp the transportation system. Public transportation issues are often talked about but hardly acted upon. Impoverished persons continue to greatly suffer the effects of inflation.

Published in The Express Tribune, June 3^rd, 2019.

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