Over the past few weeks, Pakistan has witnessed historic hikes in the prices of petroleum products – Rs30 on two occasions – that has taken overall increase to 40% in a matter of days. This has been the steepest increase in local oil prices in the history of the country, and comes on the back of several reasons – most notably, the pressure stemming on international oil prices due to the Russia-Ukraine war.
Additionally, the National Electric Power Regulatory Authority (NEPRA) also increased power tariff by Rs7.91 per unit.
Price-impact on other commodities has either followed, or will follow as producers mull how much impact they can pass on to the consumer.
For the public, the twin hikes will spark a new wave of inflation and they will be forced to cut expenditure because salaries almost never increase at the same pace.
In order to reduce the impact of inflation on an individual level, there are several measures that can be taken.
The first and foremost initiative that people can take is to switch to public transport — a difficult choice given the state it is in.
For example, my own workplace is 15 kilometers away from home. In my car (that has an average of roughly 14 km per litre), it costs between Rs220-260 for a one-way trip to my office and nearly Rs500 for a round-trip.
As an alternative, I have shifted to public transport, which, after the hike, costs me Rs130 each way. Therefore, at the very least, I am saving Rs90 one-way and Rs180 per day. This can save me over Rs4,500 per month as long as prices remain stable going forward.
It is not difficult to observe that the masses, especially the lower-income groups, are either inclined towards the shift or have already.
Another thing that should be practised is conservation of energy.
People can switch from traditional tubelights and bulbs to LED bulbs and energy savers which significantly save on electricity bills.
Moreover, people can reduce their time span of using air conditioners for example. If a family uses it for 12 hours per day, they can try and reduce it to 8 hours or even 6 hours. Reduction in its use will significantly save money. Those who are unable to reduce their consumption of air conditioning can shift to inverter ACs.
Additionally, households can reduce electricity consumption during peak energy hours. These are usually the hours from early evening to night. In Karachi, the current peak hours are 6:30 PM to 10:30 PM. The electricity tariff is nearly 40% costlier during these peak hours. Therefore, it is recommended to reduce energy use during that time.
This can be carried out by turning off essential and non-essential electricity appliances like refrigerators, freezers, water dispensers, irons, electric stoves and electric kettles. Cooking can be conducted on gas stoves during these hours.
If a household doesn’t use hot water from water dispenser, it can switch off the hot water option. This helps in halving the units used by a water dispenser. Water coolers can also be used instead of water dispensers in the summer months.
Given that the price of electricity has been on the rise the past few years, people can invest in solar energy.
A lot of households in Pakistan are switching over to solar panels and have installed the system in their homes. A battery-capacity decides the back up. A large battery can run an entire house all day with smaller and more affordable ones offering anywhere from 10-16 hours of back up.
The public can also seek tax credits if you file your income tax returns.
These are adjusted as tax credits for charitable donation, investment in shares and life insurance, contribution or premium paid to an approved pension fund and profit on debt etc, according to the Federal Board of Revenue (FBR).
These rebates can amount to thousands of rupees on a yearly basis.
While it may sound obvious, but preparing food at home is much cheaper than eating out, especially when takeout comes with an added cost of fuel.
Moreover, it is a healthy alternative. Restaurants are expected to hike prices given the spike in food prices, oil rates and energy tariff.
Another angle to this is digital food delivery applications that connect restaurants and customers and facilitate food delivery. While it is not exactly eating out, it costs as much as eating outside while eating at home. People can refrain from using food delivery applications for some time. Food is one of the prime areas that drain the savings of an average Pakistani.
People can bring a change in their daily habits in order to save at a time of inflation such as carpooling with colleagues.
Moreover, people can curb credit card purchases as well. Credit cards encourage customers to purchase on credit resulting in excessive spending.
If the workplace offers a hybrid working model, then people should avail it because commuting to work erodes salary. Pakistani work places began offering work from home and hybrid employment models during the pandemic.
Time of fiscal discipline
Times like these really test your fiscal discipline. Impulsive shopping, using the vehicle to cover short distances, or going out just for the sake of going out all take their toll on the pocket — you may not feel it on a day-to-day basis, but over the long-run, some measures that do not sound like much end up saving a lot of money for you.
The article does not necessarily reflect the opinion of Business Recorder or its owners