POL prices
Yet again an increase in petroleum products has crippled the lot of the common man. With a further raise of Rs4 per litre in the price of petrol and Rs2 in that of HSD, it is set to act as a catalyst in the price spiral across the board. Notwithstanding any of the arguments on the part of the government, it will have a negative impact on the purchasing power, apart from pushing the economy in a sluggish mode. The government’s claim that petroleum prices in Pakistan are the cheapest in the region is no consolation, as still there is much that could be done by slashing taxes and duties to make the retail price of the lifeline liquid more reasonable.
Irrespective of the fact that prices are decided on the premise of the product’s cost in the international market, the point is there is a lot of monopoly and interference of the petroleum refining and logistics sectors, respectively, who indulge in arm-twisting to keep the retail price in their favour. Coupled with this are sales tax and levies on the part of the regulatory body, making the POL prices untenable. While doing this arithmetic, what is overlooked is the impact that sustained rise in petroleum products has on the overall health of the economy.
One more aspect is worth probing: Pakistan is a recipient of POL products very often from oil producing countries on subsidised and deferred payment schedules. Even then the government estimates its dispensation cost on the current fluctuation rate, and simply passes on the buck to consumers by further loading it with taxes. This is an irrational and callous approach. A proper forensic of oil purchase bill and retail pricing will expose skeletons in the cupboard. It is a foregone conclusion that POL products pricing is a major source of revenue to the government, and that too at the expense of commoners’ dwindling purse. It’s time to undo this trend by logically rationing the price structure, and simultaneously reorienting the mode of economy to non-oil based infrastructure.
Published in The Express Tribune, October 2nd, 2021.
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