The latest rise in oil prices of Rs 8.14 per liter, just a day after none other than the Prime Minister ruled out any increases for at least a fortnight, brought things to a tipping point for a big part of the country’s population. Blaming this trend on international prices, which is only partially true, is not going to cut it with people for too long as it raises the obvious question of why prices at the pump weren’t lowered first. commensurate with the historic oil collapse down to the single digits not so long ago. Now there is going to be another wave of cost inflation as wages and employment fall instead of rising and much of the impact of the historic relief plan announced the other day has already been diluted. .
There is also the fact that inflation in Pakistan has been quite high since long before the rush in international commodity prices. And there are several things that cannot be explained by foreign supply and demand factors. Sugar, for example, has been expensive throughout PTI’s tenure. And while the government has blamed everyone for it, from the previous administration to mafias and special interest groups, nothing has yet been done to stop the artificial price spiral. There are reports now that prices have been kept high, quite on purpose, because some well-placed and connected people wanted to teach some sugar barons a lesson or two, and did so by letting the prices rise so that the consumers are harmed and producers are blamed. for that.
Whatever the real reasons, it is quite clear that the government has not been able to do much about rising prices, especially in kitchen items with almost zero elasticity. Everything, including wheat, flour, legumes, sugar, fruits and vegetables, is much more expensive today than it was just a few years ago; and despite all kinds of assurances from everyone up to the Prime Minister, prices continued to rise. When the last finance minister, Hafeez Sheikh, was fired, then information minister Shibli Faraz explained that the prime minister was forced to give up because the finance ministry couldn’t control inflation. What then should the country expect now because the new economic team has been even more ineffective on this particular front?
Instead of trying to justify grueling inflation and making unreliable and totally irrelevant claims about higher prices elsewhere, the government should at least pretend to sympathize with the people and try to solve their real problems. *