Petrol prices: 
Reactions and sufferings

The latest decision of the government has been widely condemned

Jan 01 - 14, 2001

The 5th raise in the petroleum prices in the last 14 months, specially when the oil prices in the international market have tumbled down in recent week, has come as a shocking new year gift from General Musharraf government to helpless people of this country. The statement of Finance Minister, Mr. Shaukat Aziz, that this rise in the domestic prices was necessary as a part of IMF conditionalities amounts adding salt to the wounds of this hapless nation.

The latest hike in the POL prices ranging from 7.5 to 22.48 per cent will bring another wave of inflation hitting hard the common men who are already leading a miserable life. Transporters will increase the bus and wagon fares while railways and PIA have already indicated a raise in their charge in the next few days. The cost of production of every commodity will increase resulting in price hike across the board.

As expected the latest decision of the government has been widely condemned. Immediately after the announcement of the new prices of POL, Diesel and kerosene oil by the secretary Ministry of Petroleum, the business community, political leaders, NGOs and prominent personalities scoffed at what they called 'unjustified decision of the government to send petroleum prices (POL) further up", which they found was also contrary to the commitment made with the people by the government.

Chairman of the Pakistan Commodity Traders Association (PCTA) condemning the increase in petroleum prices, said the decision would deal another blow to the country's fragile commerce and trade. He said the second hike in petroleum prices in just three months would further aggravate the common man's problems. He was of the view that such frequent oil price hikes renders an economy uncompetitive as the cost of production in every sphere of its industry goes up and snatches from the economy its tool to compete effectively.

He warned that at a time when "the inflation in the country was already too high another increase in POL prices is likely to push it to alarming heights". He anticipated that this decision would compel people to resort to corruption and tax evasion.

Chairman Pakistan Soap Manufacturers Association (PSMA) and Chairman Fairs and Exhibition Committee of KCCI Yakoob Karim termed the decision as an outcome of the government IMF reached understanding.

Demanding of the government to rollback its 'unjustified and harsh' decision, he said by pursuing the IMF given agenda the government has once again driven the economy into mire. He said this decision would for sure shatter the already crippled economy. Condemning the IMF set conditionalities for award of the standby loan, he said the government is making the people pay a heavy price for the corruption done by earlier governments through taking such uncalled for decisions.

Chairman of the Pakistan Bedwear Exporters Association (PBEA) said the government has raised the oil prices at a time when the international market have declined to $ 23 per barrel level contrary to 32-33 per barrel in the last two months. He said the decision to hike petroleum product prices is in negation to the commitment made with the people by Chief Executive General Pervez Musharraf to bring the same down following a decline in international oil market prices. He said this exorbitant rise in POL prices would pour cold water on the government's hopes of achieving the 10 billion export target. The cost of production will enhance as a follow up of increase in oil prices, and this would make Pakistani goods more expensive than those made by her competitor nations.

Chairman of the Pakistan Petroleum Dealers Association (PPDA) termed the government's decision contrary to its stance as the prices of POL the world-over declined sharply. He said the day the OPEC increased oil production by five million barrels per day, the oil prices dropped instantly. He said that this decision would be detrimental to the country's economy.

Anger is brewing up slowly amongst the poor and lower middle classes of population against the present government policies allowing frequent increases in the tariff of utilities, like, electricity, gas, petrol and telephone. Besides General Sales Tax the increased cost of utilities has led to increase in the prices of large number of essential commodities of daily use making life of the common men more miserable during the 14th months of Gen Musharraf government.

These classes of people who were in the forefront to welcome the present government from whom they expected some relief for those who were finding difficult to survive in their honest income now stand totally disillusioned. Instead of relief they now feel that perhaps no government in the past has hit them so hard in such short period as the present government. It appears that the terror has been used more ruthlessly in case of voiceless poor and have-nots rather than fabulously rich bank looters, tax evaders, smugglers and black money holders. The government, after initial expression of venom and rhetoric against these criminals, have decided to be soft on them for considerations of socalled economic revival. But nobody thought about the economic plight of the low income group while repeatedly allowing the increase in electricity, gas and petroleum prices in a short period of 14 months. Local call rates and line rents of telephone have been increased twice which hit the common man but the charges for international calls which concerned the moneyed class have been reduced.

Even Nawaz Sharif government was scared of public reaction and hesitated to allow increase in prices of petrol and gas, levy of GST on electricity bill, increase in local call charges and line rent which directly hit poor and lower middle class. All these unpopular decisions have been taken by the present government. As against this government has found many reasons to be soft on bank defaulters and holders of tax-evaded black money in billions. Government whitened black money to the tune of over 100 billion against a payment of just 10 per cent while honest taxpayers have been paying upto 25 per cent of their income as taxes. Bank defaulters are being treated softly because of the consideration of revival of economy. Wealth tax has been abolished altogether to favour the moneyed class. As against this rates of profit on small savings have been reduced by over 25 per cent (from 17/18 to 12/13 per cent) during the last ten months. As a result hundreds of thousand of retired and old people and widows who are living on the profit of their life long savings have been subjected to untold misery as their monthly income has fallen by about 25 per cent while the cost of living is constantly on the rise. Adding salt to their wounds these people are told that it was necessary to reduce the rate of profit on their savings as the government was keen to advance loans to industrialists at reduced rate of interest to promote its economic revival programme which is nowhere insight.

The poor and the salaried class are getting buried under the heap of rising cost of utilities, and direct and indirect taxes, which have left substantially less to pay for eatables, education, healthcare, clothing, etc. Amid rising cost of living and increasing unemployment those who were unable to bear the burden, either committed suicide or were being sucked into criminal activities.