The escalating prices of petrol and diesel and their nonavailability when farmers need them severely to irrigate fields during canals closure may add to already unstable market and a severe wheat crisis in the weeks to come.
The situation is exacerbated by fuel hoarders, who are taking advantage of the situation to multiply their undue profits. At present petrol price is Rs 250 per litre while diesel exceeds Rs 262. There is another possibility of quick increase in fuel prices shortly as talks with IMF progress. There would be severe sociopolitical and economic impacts of the petrodollar crisis in Pakistan. The government has only one option to address the issue by increasing the prices of petroleum products. In addition, there is no mechanism in place to check hoarders and prevent them from price gouging.
“Petrol pump owners having enough petroleum products are holding supply to common people in many remote areas and waiting for second price hike as they expect to multiply profits” said Iftikhar Ahmad, a teacher. The district administration has in Toba Tek Singh badly failed to force pumps to provide petrol. “We have neither force to check nor data of petrol pumps” said an AC on anonymity. Moreover, without proper backing of the government it was hard to act against mighty pump owners who are politicians or wealthy people, he held.
Moreover, we have no magisterial powers to arrest the violators, he said. A divisional Commissioner suggested to revive a strong local bodies system like that of General Pervez Musharraf. He said that alien bureaucrats posted in districts for some time were not equipped enough and motivated to control such issues. Only elected bureaucracy like mayors, nazims can do handle them.
Sharif Gill, a farmer of TT Singh, said that with fuel prices on the rise, the cost of producing wheat has also gone up. Wheat production is expected to be low this year due to the recent fuel hike, its unavailability and no timely winter rains. The increase in the price of fuel has made the cost of production for farmers much higher, and as a result, many may refuse to sell wheat at support price. This is likely to lead to a shortage of wheat in the market, and could cause prices to rise.
Aslam Ch, a flour mill owner and trader, was of the view that low wheat production and the hike in petrol prices are two important issues that the government needs to address. The inadequate production of wheat would surely result in an increase in the price of this staple crop, which is likely to cause food inflation. The hike in petrol prices has led to an increase in the cost of transportation, and this is to push up the prices of other commodities and services.
The government needs to take immediate steps to address this issue before things rot. It should put in place a mechanism to check hoarders and penalize them if they are found guilty of price hike. Finally, it should make available alternative sources of energy, so that the people can switch to them if petrol and diesel become unavailable or too expensive to afford. With each increase in fuel prices, there is a corresponding increase in other goods and services as their transportation becomes costlier. This has a multiplier effect on inflation which erodes the value of people’s earnings and savings.
What is more worrisome is that there has been no let-up in hoarding by unscrupulous elements in collusion with some market players and inefficient enforcing agencies. This is causing artificial scarcity of petroleum products to a great extent besides pushing up their prices further. Reportedly, other than petroleum products Pakistan imported 1.5 million tonnes of wheat, 0ver 70,000 tonnes of pulses and 4,000 tonnes of sugar during the first half of 2022-23. This is catastrophic for an agricultural country. If this trend continues it would further trigger petrodollar scarcity as foreign reserves touch new lows.
