- A petrol price hike without justification
Much had been made by the PTI government about having ‘the lowest petroleum product prices in the region’ following a price reduction of Rs 7.06 earlier this month, made necessary by the fall in international oil prices. The new price level was said to remain in place until the end of the ongoing month but that has not happened as petrol prices were quite unexpectedly raised by a massive Rs 26 yesterday. That the price hike is not preceded by a recommendation from OGRA or a cabinet level discussion, rather just an abrupt finance division notification simply citing a ‘global rise in prices’, is unusual. There is also no justification provided for keeping the levy on petrol at the maximum level of Rs 30, resulting in a double-whammy for consumers. The suspicious urgency with which this increase has been brought about can perhaps be partly explained by pressure from the IMF that has, under the ongoing EFF, demanded higher energy prices and is currently withholding a much-needed tranche of approximately $450 million.
A few weeks ago an inquiry was launched against OMCs (Oil Marketing Companies) following an artificial shortage of petrol across the country. Strict action, such as cancellation of licenses, was threatened if anyone was caught hoarding stock. Instead of any punitive measures, their price manipulation has been facilitated by the government and it has paid off as they can now sell the stock that was held back earlier in the month, at a higher price. A similar series of events is clear to see in the sugar and wheat shortage probes as well. Whatever the reasons for the untimely fuel price rise may be, it certainly puts a dent into the disposable income of the working class that is already suffering due to rampant unemployment and despite falling inflation, high prices of basic necessities in the markets that include sugar, wheat and medicines. The government can hide its economic shortcoming behind a ‘record-low current account deficit’ and the pandemic, but that does little to satisfy those at the bottom, who actually feel the pinch that hurts more with each successive governance and administrative failure.
