With the government arguing that the increase in prices of petroleum products is necessary to maintain fiscal discipline and stabilize the economy, it is the common people who will bear the brunt of this decision, which is bound to leave the already struggling middle class and low-income segments of the population find it even harder to make ends meet. The new prices of petroleum products, which are essential for daily from transportation to cooking, will have a direct impact on the cost of living and will cause a chain reaction of price increases of other commodities, ultimately leading to a rise in inflation. The government must realize that its policies should not only focus on stabilizing the economy but also on improving the lives of its citizens. The majority of Pakistanis are already living below the poverty line, and any increase in the cost of living will only make their lives more miserable.
In an effort to unlock International Monitoring Fund’s (IMF) funding, federal finance minister Ishaq Dar announced an increase of Rs10 per liter in the price of petrol. With the latest revision, the price of petrol has risen to Rs 282, henceforth, unprecedented in the country’s history. The price hike has been the main issue between Pakistan and the IMF as part of an agreement to withdraw subsidies in oil and power sectors to reduce the fiscal deficit before the annual budget is presented next month. It will be followed by a likely increase in the costs of nearly all other commodities due to higher production and transportation costs. Unless the incumbent federal government enters into a new deal with the international lender or find new streams of revenue to create fiscal space for subsidies, the inflation would continue to surge. Government and other stakeholders directly and indirectly involved with fuel sector should work on transition toward limitless renewable energy which offers huge benefits.
Green energy’s success depends on people’s willingness to adopt the technology in the first place – renewable alternatives would have to promise more convenience, speed, savings and security than the oil, coal and gas on which we’ve grown so reliant upon.
The soaring prices of petrol and electricity should be a strong wake-up call for policymakers, who need to devise more well-thought-out strategies to enable the citizenry to switch to cheaper sources of fuel and electricity. As people are struggling with the unmatched inflation, the incumbent government needs to promote technologies to harness solar power and understand its importance.
Moreover, this price hike will affect the country’s economic growth as well. With the cost of transportation increasing, businesses will have to pay more to transport their goods, which will lead to higher prices for consumers. This, in turn, will lead to a decrease in demand and a slowdown in economic growth.
It will only serve to widen the gap between the rich and poor and make life more miserable for the have-nots. The government needs to reconsider its policies and take steps to provide relief to the common people, who are already struggling to make ends meet. It is high time for the government to consider alternative policies that prioritize the welfare of its citizens rather than just focusing on fiscal targets. They need to look for sustainable ways to generate revenue without burdening the already struggling population.
