New tsunami of price hike as petrol and electricity prices increased

The coalition government has further burdened the ordinary Pakistanis already hit hard by the higher inflation

The coalition government led by PM Shahbaz Sharif has increased the price of petrol Rs 30 per litre and price of electricity Rs 7.91 per unit in a single day. This government has increased Rs 60 per lire within the span of two weeks. The government has given the shock of their lives to the ordinary people with this massive hike. The petrol prices have been increased 40% in just couple of weeks.

The government is claiming that it has no other choice but to fulfill the IMF conditions to avoid economic meltdown and bankruptcy like situation. The government is arguing that IMF programme is crucial for Pakistan to stablise the economy and shore up the foreign reserves. The IMF refused to resume the bailout programme and to release the next tranche of % one billion dollar.

The current finance minister Miftah Ismail was use to criticise the PTI government for accepting harsh conditions and surrendering to IMF while in the opposition. He was used to claim that he will negotiate a better deal with IMF if given an opportunity. But he failed to convince the IMF to ease the conditions in the recent negotiations.

Now he is implementing almost all the harsh conditions of the IMF to get the new loan. The masses have been burdened with more inflation. The current government is following the IMF dictates like the previous government of PM Imran Khan.

The coalition government led by PM Shahbaz Sharif came into power nearly 7 weeks ago after removing the PM Imran khan’s government through the vote of no-confidence with the promise to control the higher inflation and to fix the economic problems.  When both PML-N and PPP were in the opposition, they were used to criticise the PTI government for accepting the tough conditions of IMF. Now both the parties are part of coalition government and implementing the harsh conditions of IMF with letter and spirit. 

The government is asking the masses to tighten their belt but ruling elite and rich are not ready to tighten their belt. They will continue to enjoy their perks and privileges. The massive subsidies and tax exemptions given to ruling elite and rich are there to stay.

No government taxes the rich to increase the revenue and to end the poverty. The elite resist the wealth tax, inheritance tax and property tax.  The overwhelming majority of traders and business people are not ready to pay income tax and still out of the tax net. So every government shifts the burden of the crisis onto the working people and middle class.

With massive hike in the price of petrol, diesel and electricity, the government laid the basis of a new tsunami of price hike. This massive increase in the prices of petrol and electricity will raise the cost of production and cost of living. Not only the transportation of goods will become expensive but cost of production will also go up.

The government has created the conditions in which people will be forced to make choices whether to feed themselves or provide education to their children. They will be forced to make choice between buying bread or medicine.  The new wave of price hike will throw millions of people into poverty. The lower middle class and working people will be hit hard by this new tsunami of price hike.

4 out of 6 families in Pakistan earn less than Rs 40,000 per month. Nearly 60% of these families earn less than 25,000 per month. The Rs2, 000 per month targeted subsidy provided by the government to help the poor families in these difficult times might not help them in a big way to cope with this economic situation.    

The finance minister has conceded that the inevitable decision would increase inflation and create problems for people but said he could not let the country go bankrupt because of the wrong decisions of the previous government as international prices were going up and the government was suffering about Rs120-130bn per month loss on petroleum subsidies, excluding taxes.

“I have to reach an agreement with the IMF. Shaukat Tarin and Imran Khan had tied our hands by signing agreements with the IMF and then violated it,” he said, adding that the new agreement would be signed with the IMF within June because they also wanted to see our budget and reform measures. “We cannot deviate much from earlier agreements that required Rs30 petroleum levy and 17% tax. I would not impose taxes in June, but subsidy would be withdrawn,” he said.

                                                                        The editor insight247.news