Prices of daily-use items have been growing steadily in Pakistan since the Pakistan Tehreek-i-Insaf (PTI) government of Imran Khan was installed in August. Average inflation in the first quarter of the fiscal year was 5.86pc and it has surged to four-year high to 7pc in October, which is higher than the set target of 6pc by the government for fiscal year 2018-19.
Contrary to its election manifesto, the government has overburdened the common man with consecutive price hikes. Prices of all essentials have increased and it appears the government lacks a mechanism to check them. All vegetables and fruits are selling at over Rs100 a kilogram and the poor, with large families, are finding it difficult to make both ends meet. The government has recently hiked electricity and gas tariffs for both domestic consumers and industrial units. Prices of petroleum products were raised on November 1, which added to the miseries of the already overburdened masses. The International Monetary Fund (IMF) has projected the inflation rate to hit up to 14pc by the end of the current fiscal year, which means there is no respite for the people in the near future, who were promised immediate relief by the government before the general election. The recent inflationary trends have not only upset the common man but also the business community because the cost of doing business has increased and their profit has been slashed.
The government has also increased the price of petrol by Rs5 per litre for November. The price of high speed diesel has been raised by Rs6.37 per litre. Based on international prices, the Oil and Gas Regulatory Authority (OGRA) had worked out an increase of Rs9.02 per litre in the price of petrol and for high speed diesel it recommended an increase of Rs13.22 per litre. For kerosene oil, the recommended increase was Rs6.47 per litre but the government allowed an increase of Rs3. As for light diesel oil, the recommended increase of Rs6.48 has been approved as the tax/levy on the product is already negligible. According to a statement by the Ministry of Finance, the government has partially passed on the increase to consumers to minimise the burden on the public at large. The new price of petrol is now Rs97.83 while that of high speed diesel is Rs112.94 per litre. The price of kerosene oil is Rs86.5 per litre and that of light diesel oil Rs82.44 per litre.
CNG prices have crossed the Rs100 per kg mark for the first time in the country’s history after the government hiked it by 40pc. Station owners in Sindh are now charging Rs103-104 per kg as against the previous Rs81.70 per kg. When CNG was sold at Rs81.70 per kg and petrol was priced Rs93.30 per litre, the saving on running a vehicle on gas was 40pc, but it has now fallen to 20-25pc after the price hike. CNG prices in Khyber Pakhtunkhwa have risen to over Rs108-115 per kg as compared to Rs87-96 because the cost of gas is higher in the province as compared to other provinces. The station owners have made layoffs to offset the rising cost of running their businesses. At least two people out of six at a CNG station have lost their jobs. Passengers will also face additional burdens of paying higher transportation charges as 70pc buses run on CNG. Transportation of vegetables and fruits will also become costlier. People will also have to pay more to van owners transporting their children to schools.
CNG was sold at Rs67.50 per kg in December 2016, when it was deregulated by the government. After the increase in the price of CNG, transport owners have unilaterally raised fares. Some complainants said transport operatives had increased the fare by almost 100pc, though the government had not issued any revised fare list.
The figures indicate that coming months will be more difficult for ordinary Pakistanis. The rupee depreciation of around 30pc will also make its way into how everyday commodities are priced. A further impact is expected after Pakistan enters into an agreement with the International Monetary Fund (IMF). It has already asked for an increase in the cost of basic public utilities. The economic crisis in the country has been somewhat tamed after an agreement with Saudi Arabia but fears remains over inflation and more misery for ordinary people is expected. Saudi Arabia has pledged to meet half of the $12b financing gap that Pakistan faces for the current fiscal year. It also promised to place a $3b deposit with the State Bank of Pakistan (SBP) and provide up to $3b worth of oil supplies on credit — both for a year. As foreign funding has yet to come into the nation’s coffers, the government keeps relying on borrowing from the central bank to plug holes in its fiscal account, experts say. This is one of the reasons for higher inflation as the government’s borrowing from the State Bank of Pakistan (SBP) effectively means additional printing of currency notes.
The government has not completed its 100 days but it is facing criticism even from its staunch workers. They say they had not voted for the PTI to make their lives more miserable. People say they have not witnessed such a phenomenal increase in prices of gas, electricity and other utilities in the early days of any government ever. The government could have provided some relief to people by not increasing the price of petrol and diesel at a time when Saudi Arabia had promised $3b oil supplies on deferred payment and prices of crude oil have decreased in the international market. The government has also failed to improve conditions in hospitals and schools and reform the police. It will have to take serious steps to win the confidence of the common man.