Last weekend, the government reduced petrol price in Pakistan by Rs. 12.63, which is a good news for the people; however, there are other aspects and possible consequences of this step. As all of you know that fuel prices have played a crucial role for the masses as well as the ruling parties because it directly impacts their reputation and vote bank.
Recently, we got new Finance Minister Ishaq Dar replacing Miftah Ismail for the post. The previous finance minister had signed a deal with International Monetary Fund (IMF), petroleum prices and taxes on them were an essential part of the deal. Under the agreement, Islamabad agreed to take Petrol Levy (PL) to Rs. 50/liter on petrol along with a 17% Sales Tax. Following the deal’s conditions, Miftah Ismail had taken the PL to Rs. 37 prematurely; however, the policy seemed to be different under Dar.
Blame Game Over Petrol Price in Pakistan
After taking control, Dar not only decreased the prices but also reduced the PL, taking it to Rs. 32 from Rs. 37. This is not sitting right with Miftah Ismail, as he criticized the current finance minister. In a statement, he termed the government’s decision to not increase the PL this month without IMF approval, ‘reckless.”
In response, Ishaq Dar said: “I know how to deal with the IMF, and no one has to worry about anything regarding it anymore.” However, Ismail had also breached the IMF deal as he was supposed to set taxes on diesel at Rs. 15/liter, but he lowered it to Rs. 7.58/liter. Instead, he increased the PL on petrol to Rs. 37, which was also an unjustified move.
In short, Dar’s move seemed more political, and it could backfire in the future, and the prices could go up again after the imposition of PL and sales tax.
And then there is ongoing confusion over the time of announcing revised prices. First, it was monthly, then the previous government started it after every 15 days, and now the recent reports suggest that the petroleum prices would be set after every week. However, there is no official confirmation on the weekly revision, leading to confusion among the masses, OMCs, and petrol pump owners.
Good News
But there is some good news for Pakistan among all this confusion and seesaw game. Since Dar held office, the dollar rate has been coming down, while the fuel prices in the global market are also reducing for the last couple of weeks. This could lead to more relief for the people of Pakistan, but the government had to take steps under its agreement with IMF.
We will keep our fingers crossed and hope that prices will remain stable and even come down in the coming weeks.
What do you think about the petrol price in Pakistan? Do you support Ishaq Dar’s decision to reduce PL? Please share your thoughts in the comments section.
