Pakistan's Premier Multilingual News Agency

Fuel for Food

Adeel Mukhtar

The present government decision to stash petrol price following the plummeting of oil prices on the international market to give relief to the people of Pakistan in the time of Corona Virus Disease (COVID-19) is a welcome step. Appreciation of the government’s decision is also evident from general public’s opinion. For instance, Islamabad Chamber of Commerce and Industry (ICCI) President Muhammad Ahmed Waheed has also welcomed the government’s decision to reduce the prices of petrol. Moreover, the Patron-in-Chief and top leadership of Korangi Association of Trade & Industry (KATI) also welcomed government’s decision and further “applauded the PM Khan” and said that “government made historic cut in oil prices which is very much commendable. In the time of crisis due to Covid-19 pandemic this decision will provide fresh air to already struggling common people and businesses.”

Most recently, the Pakistan Tehreek-i-Insaf’s government has reduced petrol price by Rs7.06 per liter for the month of June in line with the dip in global crude oil prices due to virus-fueled lockdowns. According to the notification by the Finance Ministry of Pakistan, “the price of petrol has come down from Rs. 81.58 to Rs. 74.52 per litre.” Pakistan Prime Minister Imran Khan, soon after the announcement regarding the reduction of oil prices, tweeted that “Pakistan has the cheapest fuel cost compared to other states in South Asia. We have further reduced petrol, light diesel oil, kerosine oil prices. Now we have the cheapest fuel cost compared to other states in South Asia. India is almost exactly double. Bangladesh, Sri Lanka & Nepal are all 50 to 75 per cent more expensive than us.”

According to the International Monetary Fund (IMF) projections regarding the impact of COVID on socio-economic indicators of Pakistan, the annual growth rate for FY20 to be -1.5 per cent owing to severe output contraction in the fourth quarter of the current fiscal year. In a research report by Pakistan Institute of Development Economics (PIDE) titled “Post-COVID-19 Recovery Scenarios for Pakistan’s Economy: Projections for Fiscal Years 2020and 2021”, Muhammad Nasir et al., also endorses the fact that COVID-19 outbreak will surely impact Pakistanis’ socio-economic conditions with the rise of inflation etc. Furthermore, the study argues that: “the annualized GDP growth rate for the FY20 would be in the range of -1.36 – 0.62 per cent; the range of growth for the industry would remain in the red, whereas that of the agriculture is expected to remain positive. The services sector has also been severely hit; the decline in growth would translate into an expected fall by 10 per cent in revenues and an expected increase of 25 per cent in expenditures in FY20 as compared to FY19; Fiscal deficit and fiscal support for COVID-19 are estimated to be 14 per cent and 3 per cent of the GDP, respectively; On the monetary front, inflation and interest rate would remain around 8 per cent in the last quarter; Despite the global lockdown, the current account as a percent of GDP is expected to be 0.3 perc cent primarily due to remittance inflow of USD 22.1 billion; and the nosedive in GDP growth could result in unemployment of 4.23 million accompanied by 12.3 million layoffs, thereby putting 67 million people in poverty.”

In this scenario, the general public is bearing the brunt of economic difficulties. Along with no business at all, the public will surely benefit from the oil price relief as it is basic commodity of peoples’ lives. It not only helps one in commuting but also establishes the prices of vegetables, poultry, meat and fruits. In sum, Pakistan is one of the few countries which has managed to mobilize manageable relief efforts for the labourer and daily wagers during the pandemic. Decrease in fuel prices would help in reducing inflation. Opposition/activists on the other hand are building up narrative that PMIK is playing politics via decreasing fuel prices They should all realize by now that economy is stabilizing and so far, decisions taken by the current government to crack down corruption and other such measures has had positive reactions from the general public. When breathing space is already limited in the country, opposition is trying to twist facts and is criticizing for the sake of criticism.