#Pakistan - Petrol Hike

Increases in petrol prices have become a recurring feature of this government, it seems. After the incessant increases this year in the price of all petroleum products this year, the government has once again allowed for a further hike in prices, increasing the price of petrol (motor spirit) by Rs5.15 per litre and Rs5.65 for High Speed Diesel (HSD). The price of kerosene has been increased by Rs5.38 and Rs8.9 for Light Diesel Oil (LDO).

The rise in the price of petroleum has naturally been a cause of criticism and anger directed at the government. An increase in the petrol price by Rs5 means a further hit at income purchasing power of the masses, most of which are already experiencing a fall in their standards of living. An increase in petroleum products would entail another fresh round of cost-pull inflation on a society which is already facing the harsh brunt of heightened prices. It would mean further difficult in transport for the middle-class, when the Metro bus system is already going through cuts in subsidies.

The government must have anticipated the unpopularity this measure would bring it but it seems that it conceded to the Oil and Gas Regulatory Body (OGRA)’s recommendations. The measure is financially understandable in that a rise in prices is warranted considering the devaluation in the currency. Yet here this government will have to make the choice of causing unprecedented difficulty in the lives of the masses, or to bear the brunt of a suffocated and loss-making OGRA.

The government has made its decision but risks a drop in its popularity. However, the consumers, who this measure will hit the hardest, will not take this lying down. The increase in prices has already been challenged in the Lahore High Court- while a reversal of the policy is unlikely, the petition alone reflects the frustration of the people.