Daily Times

The Ministry of Finance has announced an unjustified hike in the prices of petrol and diesel. Earlier the Oil and Gas Regulatory Authority (OGRA) had requested the federal government to increase petrol price by Rs 4 per litre and diesel price by Rs 5.42. However, the Ministry approved an increase of up to Rs 2 per litre to avoid the masses’ wrath. The government has held the fluctuation of oil prices in the international market responsible for the present increase. Currently, the international market of oil prices has slightly gone up. The finance minister claims that the government has provided a subsidy of Rs four billion to the masses and did not fully implement the proposal of OGRA. A question arises about the unprecedented General Sales Tax (GST) that has been levied on petroleum, oil and lubricant (POL) products. Second, since the massive reduction in oil prices in the local and international markets for the last few months, the government has failed to fully pass on the benefit to the general public. There is no visible change in the prices of daily use items and fares as well as transportation charges. The imposition of taxes is the domain of the parliament but the government has done it through an administrative decision while ignoring the necessary parliamentary process. Presently, the rate of GST and excise duty in Pakistan is the highest in the region. There is no logical justification for such an increase. Possibly, the government is perturbed to meet the ambitious revenue targets. Amid declining foreign exchange reserves, the sale of POL is a cash cow for the Ministry of Finance as 25 percent revenue comes from the oil and gas sector.

The government should try to facilitate the people. There is no check on prices and inflation has gone up. There was no need to increase the fuel prices. Instead, the government could decrease the GST to absorb the slight increase in POL prices in the international market. So far, the government has failed to extend the tax net and check the flight of capital from the country. It is taking refuge in imposing more and more surcharges on utilities and increasing GST on petroleum products. The government needs to understand that due to a hike in POL prices, the rates of daily use commodities also go up, which creates more problems for the inflation-hit masses. Gas and LPG prices have already been increased and now this increase in POL prices will create more troubles for the people. The increase in POL prices might trigger a new wave of inflation. Moreover, the government is still unclear under what circumstances and conditions it will take back the unjustified high rate of GST. The government must be aware that the masses have become more conscious of their problems due to the active role of mass media and they can stand up against this injustice. The rulers must look for other means for raising cash and meeting revenue targets instead of burdening the masses with more taxes. *