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Tuesday, May 21, 2024

Is the hike in petroleum products’ prices justified?

Atif Mian criticized the former government by stating, “artificially lowering prices like the previous government with no credible long run plan will only sink the country further.”

Petroleum products’ prices have remained talk of the town from last couple of months as they have affected the masses. Renowned economist Dr. Atif Mian, in his message on Twitter shed light on the recent hike in petroleum products’ prices through a different perspective.

He began explaining his stance by saying, “politicians and journalists are demanding to reduce petrol price in Pakistan.” Atif Mian considered this demand to be pointless by saying, “this is irresponsible and short-sighted.”

He added that petrol in Pakistan is currently 20 percent cheaper than neighboring India.

Moreover, the economist highlighted that the country experienced a serious balance of payment crisis. He claimed that it is only due to International Monetary Fund (IMF) nod that there is some stability in exchange rate.

While stressing on the intensity of economic crisis the country is going through, Mian said “this is hardly the time to throw caution to the wind.”

He emphasized that Pakistan is in dire need of “real strategy” to step out of the “perennial BOP trouble.”

It is vital to continue structural reforms along with appropriate fiscal and monetary policies to contain rising inflation and external imbalances. Comprehensive reforms in tax policy and administration are also critical to boosting revenues in order to fund essential public services.

According to Atif Mian, petrol price needs to remain high in order to bring the current account in balance. He supported his stance by mentioning that oil is the major import of Pakistan. Underlining the need to keep petrol prices high, he warned that else country can be back in serious trouble.

Oil import bill has surged 95.9 percent to $17.03 billion in the first 8 months of the last financial year on the back of higher prices in global market and depreciation of the rupee, according to the Economic Survey 2021-22.

While defending the increase in petrol prices, Atif Mian emphasized that the high petrol price must be complemented by a significant energy transition policy by using the revenue from higher petrol tax to invest in energy transition which includes public transport, solar, electrification etc.

Read more: New National Solar Energy Policy to spread solar on massive scale

He urged the political parties to come up with genuine plans for meeting Pakistan’s energy requirements in a sustainable way.

Atif Mian concluded the thread by criticizing the former PTI government by stating, “artificially lowering prices like the previous government with no credible long run plan will only sink the country further.”

Hike in petroleum products’ prices are attributed to the globally rising oil prices but the recent hike was contrary to the international prices. When the latest hike in fuel prices was announced, it was likely that the prices of petroleum products would go down by Rs.15 per litre as crude oil prices had fallen in the global market.

Read more: POL prices going down!

However, national solar energy policy was also to be announced on August 1st, after the approval of the Council of Common Interests (CCI), according to a meeting of the energy task group.