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January 2, 2018
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Fuel prices: cheap no more

Business

January 2, 2018

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Much to the dismay of people, the prices of oil and its products have been increased quite steeply.

Described as the ‘New Year gift’ by some, this hike is probably going to hurt a lot more as its impact will be panoptic. As a consequence of the increase the prices of a host of items will shoot up. Already, the inflationary pressures have been quite crushing.

Over the last few years the increase in minimum wage is a proof that the governments have felt the need to provide relief to the common man. This wage is still too low to help the members of underprivileged segments of society keep their bodies and souls together.

The reason given out for the increase is the upward trend in world oil prices. At the same time, the government has claimed that it has taken that part of it upon itself. Probably it could have been more magnanimous with this kind of gesture. Another reason that comes to mind is that depreciation of the local currency, which will require higher payment in rupee terms.

Reasons apart, the increase has gone into effect becoming a matter of much discussion. Oil prices ought to be treated as essential kitchen items. Their use is wide and their sensitivity quite established. Though their level has to be in sync with international oil prices, this is one case where any increase has to be allowed with great care and caution.

At the time of announcement of the latest increase, the media was told that oil prices in some neighbouring countries were higher than they were in Pakistan. However, such a comparison might not hold ground as state of economies, value of currencies, and socioeconomic conditions of the people of those countries are different from what we have in Pakistan.

It is only fair that we look at the oil prices level in our context and our given economic milieu. Let this also be said that there has been much talk about energy conservation but without much result on the ground. Yet the basic requirement will be to maintain the growth momentum of the economy. According to official statistics, inflation has been low this year but that should not become an allurement to take measures that add to the misery of the people.

In conclusion it must be emphasised that when oil prices are next reviewed, people would be given relief and not additional burden. Also, the incidence of indirect taxation is quite high and it impacts the whole society, thus it should be avoided as far as possible.

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