Pakistan raises petrol price by 40% in one week, stirring public anger
Fuel prices at record levels as government tries to revive $6b IMF bailout package
Islamabad: Pakistan government abruptly raised petrol prices by another 20 per cent or Rs30 per litre on Friday, putting further pressure on the common people already facing the highest inflation.
With the second price hike, the fuel prices in Pakistan have gone up by 40 per cent or Rs60 per litre in one week. The first fuel price rise of Rs30 was announced on May 27. Hundreds of panicked drivers and bikers rushed to petrol pumps and waited in long lines to fill up their car tanks before the new prices were to be implemented.
“Price of petrol will be Rs209.86 per litre from Rs 179.86 per litre,” Finance Minister Miftah Ismail announced on late Thursday. The diesel will now cost Rs204.15, kerosene oil Rs181.94 and light diesel Rs178.31. The minister admitted that the fuel price shock would cause a high inflationary impact but said the government had no choice but to pass on the burden of international prices to ensure economic stability.
Fuel prices are hitting record levels in Pakistan as the Shehbaz Sharif government is in a bid to revive the stalled $6 billion bailout package from the International Monetary Fund (IMF) and address the country’s economic crisis amid political turmoil.
On Friday, State Minister for Petroleum Musadik Malik said that another petrol price hike of Rs30 was a “difficult decision” but it was taken to “save the country from bankruptcy” and bring stability.
Former prime minister Imran Khan heavily criticised the current coalition government for massive increases in the prices of all petroleum products.
The government “has increased petroleum prices by 40% or Rs60 per litre. This will increase the burden on the public by Rs900 billion and price hike in basic necessities,” Khan said in a tweet. He also said the “Rs8 increase in electricity price will put the entire country into shock” and take inflation to the highest levels in 75 years. Pakistan Tehreek-i-Insaf (PTI) Imran Khan also announced nationwide peaceful demonstrations after Friday prayers against the “government’s anti-people policies.”
Protests and public anger over massive hike
The second price hike in one week led to sporadic protests in several cities. In Karachi, the protesters damaged a petrol pump and burned tyres at the University Road. “This sudden petrol price rise of Rs60 in one week is absolutely brutal for most Pakistanis. How are we supposed to pay for the increase in food, electricity and petrol without an increase in our salaries?” Hamza Shafique, a salesman, complained.
Many Pakistanis took to Twitter demanding to end the free fuel quota and subsidies for current and retired government employees.
“Why should the elites and government officials get petrol at a reduced rate when the common man is suffering?” asked Salma Hashim, a home-based business owner. Following the public backlash, the provincial governments of Sindh and Khyber Pakhtunkhwa announced to slash the free fuel quota for government employees and ministers by 40 and 35 per cent respectively.
Common people feel the pinch
The high cost of petrol will end up being passed on to customers, experts say. Senior researcher and economist Dr Asad Sayeed said the continual increases in petroleum products “will disproportionately affect the urban lower-middle households“ as the increased transportation will push up the cost of staples like bread and milk.
Economists say the steep price hike would put an extra burden on the people but claim that if prices were not raised the country would not get the IMF programme back on track further depleting foreign exchange reserves.
High global commodity prices and rising imports continue are mainly causing inflation in the country of 220 million. The government plans to hike fuel and power tariffs to revive the IMF programme. “IMF and Pakistan agree on simple solutions by increasing fuel prices, bills and income tax. These are not reforms we needed. No expenditure cuts, nothing on circular debt, no plans to reduce the size of government” or improving governance, and privatising state-owned enterprises, Pakistani economist and former minister for Investment Haroon Sharif commented.
On June 2, the National Electric Power Regulatory Authority (NEPRA) approved a massive increase in the electricity tariff by 46.7 per cent or Rs7.9 per unit and sent the new rates to the federal government which is yet to approve the rates.