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Friday, July 19, 2024

Shedding light on globally falling and nationally rising fuel prices

Shaukat Tarin warned that another economic upheaval is on its way.

Today, during a joint press conference of former Minister for Finance Shaukat Tarin and former Minister for Energy Hammad Azhar, it was highlighted that the country is currently in a phase of economic contraction which will be triggered by the prevailing political instability.

Shaukat Tarin criticized the government for inflated electricity bills and commodity prices including necessities. He said, “inflation has broken the backs of citizens.”

He highlighted that exports have fallen by 23 percent in the month of July 2022. He said that the coalition government kept on blaming the previous regime, but the fact is that within one-month, current account and trade deficit reached Rs.4 billion.

He warned that another economic upheaval is on its way.

Tarin added, “five mini budgets have been announced and one more is planned to come as the government claims that inflation will touch 11.5 percent. On the other hand, State Bank of Pakistan (SBP) has claimed inflation to go beyond 20 percent.

He also discussed the stance given by the current government that it has saved the country from “default.” He said that in March the country had 4 percent chances of getting into default, while in July it reached to 50 percent and currently it is at 28 percent.

Moreover, he mentioned about the recent downgrading of country’s status from stable to negative by the international agencies including Moodys, Fitch and the S&P Global.

Read more: Another ‘negative’ for the country, after Moody’s and Fitch Ratings

Hammad Azhar began to highlight the inefficiencies of the current government by mentioning that the fuel prices have gone down by 30 to 40 percent in the international market since more than a month, but prices in Pakistan are still going up.

He said that the credit of this increase goes to 70 percent overbuying in the month of June at higher prices. Now, refineries are writing letters to the government that they are near to closure.

Furthermore, he said, “when oil prices were higher, the National Bank of Pakistan (NBP) retired the LCs (Letter of Credit) at Rs.248 which was Rs.8 higher even from yesterday’s market exchange rate.”

He added, “it is obvious that no matter the extent to which the international prices go down, fuel prices will go up in the country due to government’s incompetence.”

Hammad Azhar also highlighted the decline in power generation by 10 percent in the month of July in which electricity demand is at peak. He said, “although capacity for power generation is higher this year than the subsequent year when PTI was in charge as new nuclear plant of 1200 Megawatts is also operational which was being commissioned in April.”

Talking about inflation, Hammad Azhar quoted that the Consumer Price Index (CPI) has gone up to 24.5 percent from 12 percent in near past.

Coming towards inflated electricity bills, he said that Rs.10 per unit will be added in the bills as fuel cost adjustment from next month.

Read more: Skyrocketing electricity bills and response of the Prime Minister

Hammad Azhar’s concluding remarks were, “we should not forget that the government is responsible for massive economic decapitation caused in last four months.”