Last night, the federal government gave a big news to the vehicle owners as Prime Minister Shehbaz Sharif announced a reduction in petrol prices. In his address to the nation, Sharif announced that petrol price has been decreased by Rs. 18, while the diesel rate is brought down by Rs. 40.
New Petrol Prices
After the latest reduction, petrol now costs Rs. 230.24 compared to the old price of Rs. 248.74. Meanwhile, the new Diesel rate is Rs. 236 instead of Rs. 276.54.
And the new rate of Kerosene Oil is Rs. 196.45 against Rs. 230.26. Light Diesel Oil now costs Rs. 191.44 compared to the previous rate of Rs. 226.15. The prime minister said that global prices have come down, and “the coalition government has been swift to transfer the benefit of reduction in oil prices to the masses.”
In line with my commitment to the nation, the coalition government has been swift to transfer the benefit of reduction in oil prices to the masses. We will continue to provide relief as soon as we have financial cushion to do so. I believe in honest conversation with the nation.
— Shehbaz Sharif (@CMShehbaz) July 15, 2022
But is it Temporary?
Although it is a breath of fresh air, the biggest question is whether this decrease is good news or just temporary happiness. Many political and economic experts believe this is a mere political move by the government as by-elections in Punjab will be held on July 17 and government wants to win public’s vote. The analysts believe that the government will hike up the prices again after the elections.
And then there is the IMF agreement, under which the government has promised to take the Petrol Levy (PL) to Rs. 50/liter and Sales Tax to 17%. Currently, the PL is Rs. 10, and the Sales Tax is 0%. It means that prices will go up in the coming days; however, the burden shift to the masses could be less if the international petroleum prices remain low.
Another issue is lurking for the government, as Petroleum Dealers Association (PPDA) has announced a nationwide petrol pump strike on July 18, 2022, in case their demands are not met. The PPDA demands a minimum wage of Rs. 25,000 and an increase in profit margin to 6% from the current 4.9%.
So, the coming days would be uncertain, and it seems that the government could be in serious trouble over it.
What do you think about a decrease in petrol prices? Share your thoughts in the comments section.
It is temporary because petrol dealers are demanding for increased margin, surely it is supposed to increase the price. Moreover, the elimination of subsidy and imposition of levy would also cause the petrol price to go up. Furthermore, prices in international market would also increase because autumn is almost upon us and in colder regions people would be increasing their reliance on fossil fuels in order to keep their residences heated the weather would increase demand for crude oil.
Anyway keeping the prices higher has been doing good to Pakistani economy. I think the government should take it up to PKR 300 because then the product would be treated as necessity and people would prefer walking and reduce their health bills as well.