Fears of Another Increase in Petrol Price
Why are the Petrol Prices Rising?
Pakistan may face another increase in the price of petrol. The increase could be between Rs12 to Rs22 per litre. This could happen in the last 15 days of August. The reason for this is that the prices of goods all around the world (global commodity prices) are getting high.
In the beginning of August, the prices of petrol and diesel were already increased by nearly Rs20 per litre. This made the local price of these fuels to be around Rs273 per litre. The International Monetary Fund (IMF) loan conditions forced this change. Our government had no choice but to pass the burden of the rising prices to the people of Pakistan. This happened instead of the government helping people and businesses by paying part of the cost (subsidising).
Potential Increases in Diesel and Petrol Prices
An expert named Tahir Abbas from Arif Habib Limited shared that the prices of diesel might increase by Rs20-22 per litre. The price of petrol might increase by Rs12-13 per litre. This could happen in the second half of August.
The Need for a Review of the Petroleum Development Levy
Amid these concerns, a respected business leader, Khalid Tawab, from the Federal of Pakistan Chambers of Commerce and Industry (FPCCI) has spoken. He urged the government to rethink their decision to increase petrol prices. He stressed the need to check the petroleum development levy (PDL), which is the extra money charged on each liter of petrol (currently Rs50). He suggested that this levy should be adjusted to make petrol and diesel prices more affordable for the people.
Possible Impacts of the Petrol Price Hike
The increase in petrol prices could have serious effects on the economy. There are already signs that the economy is slowing down. There is a decrease in the production of goods (large-scale manufacturing) and earnings from exports. These signs point to the possible effects of the increased petrol prices on businesses. This could lead to more businesses closing down and other economic challenges.
As these issues continue to rise, the business community is trying to talk to the government. However, time is running out as the current government’s term is ending in the next ten days.