Petrol prices in Pakistan increased by Rs.5 per litre
submitted 8 months 22 days 5 hours ago by: amersarfraz : 7 commentsThe government on 1st of March, announced an increase in petrol prices by Rs.5 per litre. Public is not going to welcome this increase, but there are no surprises.
This price hike was long due, as the government was holding back the petrol prices in Pakistan for quite a long time now. Oil prices in the international market were climbing up for the past several months, however, the government of Pakistan did not pass on the rise in prices to the general public mainly due to the upcoming elections.
This has been a trend in Pakistan that nearing the election period, the ruling party holds backall sorts of price increases in the hope that the public would appreciate the efforts to lower the commodity prices and re-elect the ruling party. However, once the elections are over and the party is re-elected with majorty votes, it would have a free hand for another 5 years to play with prices hikes.
On the other hand, if for some reason, the ruling party is not re-elected, the new government would be left with no choice but to raise the prices and held responsible for the act of agonizing the public.
This is exactly what has happened this time around as well. The rise in petrol prices was long awaited and has eventually come out to haunt us. The point for the public to note is that this has nothing to do with the new government (which has not even be offcially formed as yet) and is due to the price control strategy followed by the previous government. This increase however, is just a fraction of what is actually aimed and more increase in prices will be coming soon. So stay put and see what more is coming our way !
Comments
yeah now a chain reaction of price increase will follow.....everyone from darzi to cable operators starts charging high....baji petrol jo mehnga ho gaya haii
how i wish for a huge oil reservoir to be found in Balochistan....
I like your innocence, but if only wishes could come true just like that, I would not be wasting my time sitting at this computer.
Ahhhh....but you are right, this is just the beginning. I heard electricity charges have also gone up and I am waiting to hear the CNG prices go up. With more pressure on petrol prices, CNG has an excellent opportunity to make few extra bucks and I am certain they would not loose it.
O yeah...and that remind me, a hike in petrol prices would definitely give a boost to demand of CNG kits resulting in a shortage of supply, which in the end would mean sky rocketing CNG kits prices. A very Happy New Year and New Government to all of you !
Why is the government involved in this business of fixing commodity prices? That is not a government function. whatever happened to Laissez faire?
well laissez-faire isn't applicable to such natural resources coz their supply is not merely a function of their demand but also of capacity of oil wells(limited) n policies of greedy powerful producers (eg OPEC)
had the supply been a function of demand only then laissez-faire would have been applicable
3 years ago i got an A in economics.....but then my retention powers r not that powerful....is liye piyar se bezti kijiye ga
Well we are talking about price fixing here and it should be fixed purely by the market. If the supply is plentiful prices will drop and vice versa. The government can certainly intervene if the producers are engaging in price fixing or hoarding but they cannot arbitrarily set the price of a commodity since that stymies competition.
For example, if it costs corporaion A $1 to get oil to the market and corporation B $1.25 and if the government fixes the price at $1.15 then corporation A benefits since corporation B cannot even recover its investment.
The market however will allow corp B to continue functioning and give it time and monetary resources to lower its production cost based on the current level of reserves in the world. If oil production is not meeting demand then corp B can still sell oil at a profit and corp A will merely make a larger profit (they certainly will not voluntarily drop their price)
You can argue that people will benefit from the lower price but you will be ignoring that fact that if corp B files bankruptcy or wraps up alltogether then.
1. Corp A will become a monopoly
2. Tax payers money will absorb the effects of corp B's bankruptcy
3. Thousands of jobs will be lost
petrol prices r up in every country. i don;t know wht all happened to world economy and whn it will stop. i heard in few years petrol price will get double to whatever it is rite now so b prepared
http://www.kshitij.com/research/petrol.shtml
hi