Oil Price hike

Published on – June 28, 2020 – 8:00 am
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The federal government increased the price of petroleum products after many days the supply chain remained disrupted. The disruption was caused by a strong mafia in the country who refused to abide by the price reduction that federal government announced in the wake of global pandemic and subsequent fall in the demand and consumption of oil worldwide owing to lockdowns in major economies of the world. Prices of oil hence fell worldwide and government decided to shift the trickledown effect of this relief to the masses. However, the mafias involved in the business seemed unmoved. Oil was nowhere to be found apart from Pakistan State Oil outlets.


The federal government increased the price of petroleum products after many days the supply chain remained disrupted. The disruption was caused by a strong mafia in the country who refused to abide by the price reduction that federal government announced in the wake of global pandemic and subsequent fall in the demand and consumption of oil worldwide owing to lockdowns in major economies of the world. Prices of oil hence fell worldwide and government decided to shift the trickledown effect of this relief to the masses. However, the mafias involved in the business seemed unmoved. Oil was nowhere to be found apart from Pakistan State Oil outlets.

Government kept on promising that the mafia would be dealt with strongly but to no avail. Finally, the prices of oil were increased to an unprecedented extent. The hike made overnight without following proper channel is between 27 to 66 percent depending on the product. There was no summary moved from Oil and Gas Regulatory Authority (OGRA) and within minutes the mafia stepped in to boom and mint money of the opportunity.

It is learnt that the government is now charging about Rs. 47 per litre taxes on petrol and high speed diesel. Moreover, the General Sales Tax on the petroleum products was already increased to a standard rate of 17 percent across the board with a view to generate additional revenue. It may be mentioned here the GST on petroleum products until January was as follows: 0.5 percent on light diesel, 2pc on kerosene, 8 percent on petrol and 13 percent on high speed diesel.

The increase of taxes on oil product has double negative impact on the masses. On the one hand, it empties their pockets and overburdens their fragile source of income on the other hand it increases the prices of other products which are dependent on petroleum combustion vehicles for transportation. The end result is high inflation and low purchasing cap city. The global pandemic Covid-19 has already crippled economy and has caused millions of job losses across the country. Many industries have refused to pay salaries to their employees while others have fired the contract employees, citing the Covid-19 and its impacts over the size of their income and ability to maintain the workforce.

With all these natural and made induced hardships for the people in Pakistan, the Pakistan Tehriek-e-Insaaf (PTI) Government has made life all the more difficult for common man in Pakistan.

The promise of change, it seems, has lost its effectiveness as it is actions not the words that matter in the practical statesmanship. The ability of a leader is to make a decision and have it implemented across the board, no matter what. Bowing down before strong mafias means the leadership is not strong enough to resist the pressure from those quarters. Explanations on television will do no good and a single step can add to the unpopularity of government beyond imagination. If Imran Khan wants to remain a popular leader and wants to be remembered one in the true sense of the word in the echelons of history, he has to be strong. Otherwise, quitting is a better option!