Thursday June 20, 2024

Protests continue in major cities against inflated power bills

The country on Friday witnessed wheel-jam strikes and total shutdowns in major cities in protest against the rising inflation and inflated power bills

By Israr Khan & Mohammad Anis & Munawar Hasan & Sher Ali Khalti
September 02, 2023
Protests in Thana Malakand and across the district against high electricity bills and inflation. Many laborers express concerns about low incomes and increasing expenses, finding it hard to manage their finances. Twitter/waqar_younus
Protests in Thana Malakand and across the district against high electricity bills and inflation. Many laborers express concerns about low incomes and increasing expenses, finding it hard to manage their finances. Twitter/waqar_younus

ISLAMABAD/KARACHI/LAHORE/RAWALPINDI: The country on Friday witnessed wheel-jam strikes and total shutdowns in major cities in protest against the rising inflation and inflated power bills. 

In Karachi, the wholesale and big markets remained closed in protest by traders against inflated power bills and rising inflation. The traders of Karachi warned if the bills are not reduced, the series of strikes and protests may intensify.

In Lahore, traders announced a complete shutterdown strike on Saturday (today) against the highest-ever inflation, inflated power bills and continuous increase in fuel prices.

The Jamaat-e-Islami has announced a complete shutterdown strike on Saturday (today) throughout the country.

Addressing a press conference, the traders leaders said successive governments had compelled the business community to unanimously show their shutterdown power. They made it clear that the strike call was apolitical and also announced to hand their businesses over to the rulers in Islamabad to run them in accordance with their policies. They refused to pay unjustified taxes and increased petroleum and electricity prices. They said the government had forced the traders and public on the roads by hiking the power bills, which were higher than their monthly salaries. They demanded the rulers suspend free supply of power to influential people.

Addressing the media in Peshawar, JI provincial general secretary Abdul Wasi termed shameful the statement of caretaker Prime Minister Anwar-ul-Haq Kakar about the public outcry against the electricity bills. He said traders organisations across the province had announced their support to JI’s strike call. He said protest and strike were the constitutional right of the people and they would not succumb to any browbeating of the government.

JI Amir Sirajul Haq, addressing the JI Youth Wing convention at Liaquat Bagh, Rawalpindi, accused the caretaker government of implementing the IMF agenda and said there would be no compromise on their countrywide protest against the inflated electricity bills and increase in petroleum prices. He said it was a 13-party coalition, led by the PMLN and PPP, which brokered the IMF agreement and now the caretaker regime had taken up the task of implementing its agenda.

Siraj also pointed out that the PTI-PMLQ had initiated talks with the IMF. “The last two regimes are responsible for pushing the country to the economic crisis and common people under the IMF clutches,” he said.

He also took an exception to a statement of the caretaker prime minister that inflation had not reached such a stage that called for strikes. “Mr. Prime Minister, there will be a shutdown strike across the country tomorrow (Saturday). It is surprising to note that the prime minister does not feel that there is inflation in the country. Can I ask whether you are the caretaker of Pakistan or that of the IMF?” he asked.

The JI Amir also came down hard on the PMLN and PPP leadership, saying both Nawaz Sharif and Asif Zardari were worried about the future of their children and wanted to see them as the country’s prime minister while Fazlur Rehman was also trying to promote his son. “Shehbaz Sharif also fled the country after leaving the caretaker premier in big trouble,” he said and called upon the people to hold all these families accountable in the next general elections.

Meanwhile, in yet another rude shock to the people, the caretaker government hiked the LPG tariff by Rs459.85 per 11.8kg cylinder for both domestic and commercial consumers. This came on the heels of the highest-ever increase in the prices of petrol by Rs14.91 per litre and high-speed diesel (HSD) by Rs18.44 per litre.

The revised LPG price is set to take effect from September 1. Notably, this follows a 13.45 percent or Rs23.9 per kilogram hike in the price of LPG during August. The Oil and Gas Regulatory Authority (Ogra) attributed this consistent escalation to two key factors: devaluation of the rupee against the US dollar and increase in the prices of propane and butane — the principal components of LPG — by Saudi Aramco.

In an official notification, Ogra explained, “The reason behind the increase is that the LPG producer price is linked with Saudi Aramco-CP [contract price] and US dollar exchange rate. As compared to the previous month, Saudi Aramco-CP has increased by 19.83 percent, and the average dollar exchange rate has gone up by 4.5 percent, resulting in an increase in the LPG consumer price by Rs459.85 per 11.8 kg cylinder (19.37%).”

It may be noted that Pakistan imports LPG from Saudi Aramco, the Saudi national petroleum and natural gas company, and is one of its key customers. It also imports from other countries, including Qatar, the UAE and Iran.

The price of LPG is influenced by various factors such as international market prices, exchange rates, transportation costs, taxes, and government regulations. The price of an 11.8kg LPG cylinder in July 2023 stood at Rs2,092, which climbed to Rs2,373.6 in August, and now in September, it has reached Rs2,833.5. The Ogra’s notification revealed that the per-kilogram price of LPG will rise to Rs240 in September, up from Rs201 per kilogram in August 2023.

The revised pricing will have varying impacts on different cylinder sizes. The 11.8kg domestic cylinder will witness a surge of Rs460, bringing its cost to Rs2,833.5, while the commercial cylinder, weighing 45.4kg, will now sell at Rs10,896, becoming costlier by Rs1,770. The domestic cylinders were priced at Rs2,373.6 and commercial cylinders at Rs9,132 in the previous month. The Ogra has determined the producer price of LPG, assuming a composition of 40 percent propane and 60 percent butane, to be Rs163,826 per ton. This price incorporates an excise duty of Rs85 per ton, excluding the petroleum levy of Rs4,669 per ton.

Consequently, the total cost of an 11.8kg cylinder amounts to Rs1,933.17. Before the imposition of 18 percent GST, the producer price would have been Rs168,497 per ton, resulting in a price of Rs1,988.2 per cylinder.

The rising LPG prices are putting an extra tax burden on the consumers. Taxes are added at the producer level and during purchase, the consumers are exposed to double taxation.

The Pakistan Railways also announced five percent increase in fares of all passenger trains from September 2. According to officials, the decision has been taken due to the recent surge in the prices of petroleum products.

The fares for express, passenger, and intercity trains have been raised by 5 percent, along with a similar 5 percent hike in parcel and luggage rates. The fare adjustments will come into effect from September 2 (today). It’s worth noting that this marks the second fare increase within a span of 16 days. Previously, on August 16, the train fares were raised by 10% due to similar reasons.

In a related development, the average price of sugar has nearly doubled in a year, surging to Rs170.50 per kg on week concluded on August 31 from Rs87.86 per kg recorded in the corresponding period of last year, according to the latest Sensitive Price Indicator (SPI) data.

Issued by the Pakistan Bureau of Statistics, SPI is computed on a weekly basis to track the price movement of essential commodities with a view to reviewing the price situation in the country. This important inflation indicator comprises 51 essential items collected from 50 markets in 17 cities of the country.

According to the official data, the residents of Quetta are made to pay Rs190 for one kilogram of sugar, the highest in the country followed by Karachiites who are buying sugar at Rs180 per kg while sugar price for inhabitants of Sukkur in central Sindh has been the lowest. It costs them just Rs158 per kg, followed by the residents of Bahawalpur who can buy sugar at Rs165 per kg.

Increasing by Rs82.64 per kg, the year-on-year trend depicts an increase of a whopping 94.06 percent to Rs170.50 in refined sugar price between August 31, 2022, and August 31, 2022. As per SPI’s weekly analysis, the sugar price for the current week ending on 31st August 2023 ballooned by Rs11.4 per kg, from Rs159.10 per to Rs170.50 per kg, showing an upward push by 7.17 percent in the last week.

In contrast, the PBS data suggests a huge price difference in sugar being sold in open markets and utility stores. Against the open market rate of Rs171 per kg, sugar is available at Rs91 per kg at utility stores. According to weekly SPI, the price of gur or jaggery (average quality) for the outgoing week increased by Rs 4.72 per kg, from Rs223.49 per to Rs228.21 per kg, showing an upward push by 2.11 percent in the last week.

Going to the roof, by Rs91.57 per kg, the year-on-year trend portrays an upsurge of a staggering 67.02 percent to Rs170.50 in gur price between August 31, 2022 and August 31, 2022.

In comparison, the PBS reported that the price of flour steeply rose by a shocking 126.26 percent and tea by 93.94 percent over the corresponding period of last year.

On overall basis, the PBS reported a staggering 27.4 percent year-on-year increase in headline inflation, as measured by the Consumer Price Index (CPI), for the month of August 2023. CPI Urban inflation increased to 25.0 percent on a year-on-year basis in August 2023, compared to 26.3 percent in the previous month and 26.2 percent in August 2022. On a month-on-month basis, it rose by 1.6 percent in August 2023, down from 3.6 percent in the previous month and 2.6 percent in August 2022.

In rural areas, CPI inflation surged to a 30.9 percent on a year-on-year basis in August 2023, slightly lower than the 31.3 percent registered in the previous month but substantially higher than the 28.8 percent in August 2022.

On an overall basis, YoY SPI inflation eased to 27.9 percent in August 2023 from 29.3 percent in the previous month and notably reduced from 34.0 percent registered in August 2022.