Will Fuel Prices Continue To Rise?

Last week, the Federal Govt hiked the prices of all petroleum products. The news came as a shock to everyone as it had not even been a week since the govt had previously hiked the prices. The last hike took place on 26th May, which also increase the prices of petrol and diesel by Rs. 30, taking them from Rs. 149.86 to Rs. 179.86 and Rs. 144.15 to Rs. 173.15.

The news was announced by Miftah Ismail, the Finance Minister, during a press conference. The hike in petrol’s price was again Rs 30, taking the previous price of Rs. 179.86 to Rs. 209.86. In the case of Diesel. Recording Rs. 30 taking the previous price from Rs. 174.15 to Rs. 204.15. Calculating the increase in the percentage of the previous price, it comes out to be a whopping 40%. Besides hiking fuel prices, an increase in the cost of electricity was also ordered.?

The night this increase in fuel price was approved, a massive rush was witnessed at the gas stations. Some gas stations were even shut down by the operators for various reasons. A huge public outcry has been witnessed in the days that followed.?

However, some analysts have claimed that there’s still some subsidy being provided in the fuel prices. Others claimed that the IMF wants a reenactment of the Petroleum Levy and GST on fuel prices. Here’s a tweet by Uziar Younas, the Director of the Pakistan Initiative at the Atlantic Council, a Washington D.C.-based think tank:

If this is true, doing so would cause massive inflations across the country as everything from basic commodities to luxuries needs to be transported. Uzair Younas’ claim has been derived from Miftah Ismail’s press conference earlier, which shows it’s most likely the case.?

The government will continue hiking the prices in the coming months to ensure the release of IMF’s next package as well as recover losses. However, the government has once again repeatedly claimed of revealing a “relief package for the classes most affected”, but no news of when and how that will be.?

Currently, there seems no end-in-sight of this dilemma as the Russia-Ukraine war surpassed 100 days. International Brent crude oil prices have been going up and down between $117-124 per barrel, which is the highest it has been since 2008 and one of the highest in recent history.?

Last week, OPEC countries agreed to increase output by 50% but even that has not been able to reduce prices. It seems the conundrum will prevail until the Russia-Ukraine war settles. Until then, countries around the world will have to suffer.?