- Ordinary citizens to bear brunt of Brent Crude hike
With international oil prices jacking up following rationalised OPEC supply and greater global demand, the Pakistan government has been pleased, as always, to pass on the consequences of these increases to hapless consumers. The latest jolt is effective March 1, but the government maintains that prices here are lower than in India, Bangladesh and Sri Lanka. This reasoning is scant solace to millions of already distressed working, lower and middle class citizens who would be directly affected by the inevitable chain-reaction explosion in prices of everyday commodities. The bread-basket bar will be raised higher for these poor folks. With benchmark Brent Crude expected to surpass $80 per barrel shortly from lows of $28 in February 2016, the future bodes ill not only for tattered consumer wallets but also the economy. Pakistan’s petroleum import bill rocketed to $6.67 billion in July-December 2017 from $5billion in July-December 2016.
The government accepted all the OGRA’s price increase recommendations, except for high speed diesel, where proposed Rs6.94 per litre was cut to Rs2.62 to placate transporters and agriculturists, and as a pleasant side-effect, benefit owners of luxury vehicles, the readily recognisable symbol of ‘greatness’ among our elites. But conversely, general sales tax on HSD was raised to 31 percent (from existing 25.5 percent), and much higher as compared to 17 percent for other petroleum products. The prices of widely used petrol and kerosene oil (this especially in rural and remote areas) were increased by Rs3.56 and Rs6.28 to Rs88.07 and Rs76.46 per litre respectively. With the government already charging consumers a tax of Rs10, Rs8, Rs6 and Rs3 per litre on petrol, HSD, kerosene and light diesel oil respectively, regular such future increases would cause back-breaking inflation. Rupee depreciation, boosting exports, building up forex reserves and prohibitive regulatory duty (actually enforced) on imported luxury items are one way. But austerity measures to reduce domestic oil consumption, increased use of cheaper LNG, and various other environmentally friendly measures, successfully tried elsewhere, should also be undertaken seriously. Political parties, including the PTI and PPP to begin with, eyeing general elections, have sharply criticised the latest anti-people oil price hike.