ISLAMABAD: The recent announcement of a significant increase in petroleum prices in Pakistan is likely to increase transportation costs with a direct impact on food prices and inflation in the country.
Last night, the government announced over Rs 25 in Petroleum prices. After the announcement, the price of petrol settled at Rs331.38 while that of high-speed diesel reached at Rs329.18. The was the third increase in petroleum prices since the caretaker setup came into power.
It is worth mentioning here that most of countries are taking all possible measures to bring inflation down while boosting the purchasing power of the masses. However, in Pakistan, the continuous increase in fuel prices, coupled with a major increase in power and gas tariffs, leaves the people at the mercy of hoarders and profiteers who are playing the tactics of demand and supply to take advantage.
Impact of Increase in Fuel Price
The increase in fuel prices occurred at a time when the masses were already protesting against the high power tariffs on their electricity bills. The current increase would have a drastic impact on transportation charges, which would lead to an increase in the prices of food items.
Meanwhile, the hoarders, shopkeepers, and food item suppliers would start to push the price list to an excessive list, even 20 to 25 percent more than the official prices.
After the 18th Amendment, checking the prices has now become a provincial subject, and due to the lack of coordination among the provinces and within the respective provincial units, the hoarders and vendors are taking the prices to a high level without any check.
Meanwhile, the prices of flour and sugar are related to the federal subject, which also witnessed an increase in recent times. Hence, federal and provincial governments are equally responsible for the high food inflation.
However, the recent major increase in petroleum prices has made the situation more alarming which could have a direct impact on the masses to suffer further food inflation.
