The government has increased the price of petrol for the second time this month. A litre of petrol is now being sold at an all-time historic price of Rs127.30. Yet, the government claims that petrol prices are the lowest in the region and it is absorbing the decades-high global oil prices to provide relief.
The global average price of petrol has doubled over the past 20 years. This week oil prices climbed above $80 a barrel, hitting the highest level in three years. Prices have been rising on the back of an emergency crisis in Europe. In UK, the situation has worsened and soldiers have been called to drive tankers and replenish filling stations as people resorted to panic buying.
High fuel prices are part of a global energy crunch that has led to disruptions across China, United States and Europe. Petrol and diesel prices have also spiked in several countries including India and South Africa. Higher crude prices have a knock-on effect on several industries, from transport all the way through to manufacturing leading to a rise in prices of nearly all products.
The coronavirus pandemic also disrupted global oil prices. In April 2020, the price of oil plummeted to record lows amid lockdowns and weak demand. By September 2021, it surged to a near three-year high due to which oil importers such has Pakistan have been forced to increase the prices of petroleum. The backlash has been intense as the public and opposition have expressed resentment over the move.
Finance Minister Shaukat Tarin claims that petrol prices in Pakistan are still cheaper than rest of the region and only sixteen countries – who are oil producers themselves – have lower prices. He maintains that Pakistan has cheaper petrol than India, Bangladesh and other countries. Although the minister’s remarks have weightage, people are facing from persistent inflation and the economy is being affected.
According to reports, the global price of petrol could increase to $90 per barrel. This implies that more petrol hikes are expected in the coming months. The US dollar is also heading for the largest rise and the rupee has depreciated to historic levels. It is frustrating for the government and disappointing for the public that lofty claims of bring the economy on the right direction have gone off track.