CNG prices
Currently petrol price is Rs145.82 a litre and prices of CNG have also registered a steep rise in various provinces; now the gas price in Sindh stands at Rs200 a kg. In April, petrol was selling for Rs108 a litre and CNG price in Sindh was Rs123 a kg in quarter one of this year. CNG prices in different provinces are still lower than the petrol price, so people prefer gas to petrol because of the resulting savings. Since CNG price is not uniform in the country, there is the likelihood that those living in border areas of one province might prefer to buy the relatively cheaper gas in the neighbouring province. This would reduce sales of gas in the province where the commodity is dearer leading to problems for gas sellers. The persistent increase in fuel prices is resulting in continual rise in prices. Recently, the government has given some tax relaxation on petrol but has increased sales tax on CNG. The price of CNG has been increased within short intervals, and the recent hike is being attributed to the purchase of costly RLNG.
The increasing fuel cost will further burden the ordinary people and affect the national economy too. Increase in fuel prices affects most sectors of the economy. It pushes up transportation cost, increases the cost of production in the agricultural and industrial sectors. There is a cascading effect on the overall economy. The rise in transportation and production costs of food items and of industrial raw materials will further erode the already shrinking purchasing power of people with limited means. The relentless price rise and the resulting inflation will make life more difficult for the common people — their income and savings will go on diminishing. The dynamics of the rising prices in all likelihood will reduce demand. All this points to cost-push inflation. The government will have to focus on measures to tame inflation and price rise. One way to do so is to limit imports to bare essentials. Now the outlook is chronic sacrifices and price rise.
Published in The Express Tribune, November 20th, 2021.
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