Petrol and diesel expensive, government decides to maintain subsidy — Global crisis poses a major threat to the economy

The federal government has significantly increased the prices of petrol and diesel in view of the rising oil prices in the global market, however, it has been decided to continue subsidies for motorcyclists and the transport sector to provide relief to the low-income group.

With the approval of the International Monetary Fund, the government has increased the price of petrol by Rs 6.51 per liter and the price of diesel by Rs 19.39 per liter, which is effective immediately.According to officials, the progress in achieving the target set in terms of petroleum levy is satisfactory and the collections during 10 months have also exceeded the target of 11 months, which is showing the possibility of strengthening the government’s financial position.

On the other hand, experts from the United Nations Development Programme have warned that the ongoing tensions in the Middle East could pose serious risks to Pakistan’s economy.

According to an initial estimate, Pakistan could lose between $10 billion and $68 billion annually due to this crisis.

According to economists, the increase in oil import costs by $300 to $334 million per month, a decline in remittances, obstacles in exports and additional costs due to war threats are increasing pressure on the economy.

Moreover, the reduction in LNG supply from Qatar has affected electricity production, resulting in two to three hours of load shedding in different parts of the country.

This situation is also likely to have a negative impact on industrial activities and employment.

Experts say that if global oil prices reach $150 per barrel, the inflation rate could go up to 15 to 17 percent, which will cause further difficulties for the common citizen.