Petroleum And Prices


Prime Minister Shahbaz Sharif has decided to provide relief in petroleum prices as Eid is approaching. This reduction was announced after the crude oil prices dropped internationally. According to reports, the global benchmark Brent crude saw a reduction of $7 to below $100 a barrel earlier this week. That development, the government is considering passing on the benefit of reduced oil prices in the international market to the consumers that have been suffering at the hands of record-breaking inflation.
Terming the reduction in fuel prices as a ‘gift’ for the public on the occasion of Eid, reports suggest that the rate of petrol is expected to be cut by Rs 10 and of diesel by Rs 25 per litre. However, the prices of petroleum products cannot be reviewed ahead of July 16 and the federal cabinet will have to give its approval before any relief can be passed on to the consumers.

The government will have to kowtow to the demands of the International Monetary Fund eventually as it is on verge of a an economic meltdown, and therefore, such a move by the incumbent government, and that too days before the July 17 by elections, signals only one possible explanation and that is that this is a move by the ruling political elite to benefit no one else but those in power as they fear they might have lost some votes because of the galloping inflation caused by the rising oil prices.
If it is the case that the government is in a fiscal stranglehold and is short of revenues for its day-to-day operations, and to pay for its necessary imports, it should not go for such a price-cut. These decisions are necessary as the country is suffering a lot already, however if it is only for political gains, this reduction is going to worsen the national economy.

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