KARACHI: Pakistan is in the grip of a wave of increase in international oil rates but there is a limit of everything. Recent hike of petroleum prices of Rs.10.49 per litre in Pakistan is massive and unbearable hike, said Ateeq ur Rehman, an economic & financial analyst.
The hike in petroleum prices will have triple negative effects, the logistic/ transport cost will shoot up automatically, the cost of production will rise and the electricity tariff will swell, he said.
He said the increase in transport cost, cost of production and electricity tariff is enough for pushing the already existing high rate of inflation which is 12.66% to 15%, which is a huge rise. This is enough for common man to scream.
He added that for electricity we are into capacity payments like Rs.750 billion and circular debt flow of Rs. 450 billion per year due to expensive imported fuel base projects of electricity production. In 2018 the electricity tariff was Rs. 11.72 per unit which has grown to Rs. 16.44 per unit. Adding back Quarterly Adjustment, Fuel Charges Adjustment, Electricity Duty, General Sales Tax, 3% Further GST, Income Tax, TVL Fee, Government Charges, etc, it will be now over Rs. 20 per unit. One fails to understand that after adding different taxes and surcharges why there is a need of Additional Government Charges, he said.
Increase in logistics, transport and power tariff ultimately effects cost of production thus making the consumer goods as more expensive. As a matter of fact, it is quite challenging for common consumer because the purchasing parity diminishes, said Ateeq.
In order to provide urgent relief to common man, the government should take urgent initiatives to control imported and rising inflation of Pakistan including electricity, petroleum and gas prices.
Copyright Business Recorder, 2021
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