(Publish from Houston Texas USA)
(By Amir Muhammad Khan)
The war imposed on Muslim countries during the holy month of Ramadan is not only affecting the Muslim world but is also expected to have far-reaching consequences for the global economy. Even after the conflict ends, its economic repercussions may continue to influence international markets for years.
Against this backdrop, Prime Minister Mian Shehbaz Sharif, in his recent address to the nation, spoke about the deteriorating global economic situation, the growing risk of recession, and the surge in petrol prices. He warned that fuel prices may rise further and announced several government measures aimed at austerity, economic stability, and promoting national savings.
While many of the Prime Minister’s announcements were welcomed, one aspect of the petrol price increase has raised serious public concerns.
Why Was Existing Petrol Sold at Higher Prices?
A key issue is that petrol already available in the country — including fuel stocked at petrol pumps before the official price increase — was reportedly sold to consumers at the newly increased rates.
This decision created significant unrest among the public. Many people are asking a simple but important question: why was existing petrol sold at higher prices?
Because of this policy, petrol pump owners — and possibly other stakeholders — may have earned billions of rupees in additional profits within just a few days.
There is little doubt that Prime Minister Shehbaz Sharif intends to stabilize the economy. However, it remains unclear why advisors and officials around him did not draw attention to this issue or respond clearly to the public concerns regarding who benefited from these sudden profits while the government simultaneously called for austerity.
Pakistan’s Petrol Price Hike Compared to Other Countries
Another troubling point is that Pakistan appears to be among the few countries that raised petrol prices sharply — by nearly 21 percent.
In contrast:
- India, with a population five times larger than Pakistan, has not increased petrol prices so far.
- Saudi Arabia, from where Pakistan imports oil on deferred payments, has also maintained stable fuel prices.
- Bangladesh has implemented only a minor increase compared to Pakistan.
The unfortunate reality is that the price hike also applied to petrol that was already present in the country before the emergency situation. Critics argue that this allowed petrol pump owners to effectively “celebrate Eid during Ramadan,” highlighting possible regulatory negligence.
Rising Fuel Prices and the Burden on Citizens
When petrol prices increase, the cost of almost every commodity rises as well — from transportation to basic goods. Even small items become more expensive because fuel costs influence the entire supply chain.
As a result, the petrol price hike has had a direct impact on poor and middle-class citizens, who are already struggling with inflation.
Some analysts believe that the increase may have been implemented under pressure from the International Monetary Fund (IMF). However, the financial benefit appears to have gone largely to petrol pump owners rather than providing relief to the national treasury.
LPG Price Surge Adds to Economic Pressure
The situation with LPG gas prices is similarly concerning. LPG has reportedly increased from Rs. 2,200 to Rs. 4,000, further burdening households.
The government has blamed hoarders and profiteers for creating artificial shortages. If that is the case, the responsibility clearly lies with administrative authorities to take strict action against such elements.
Unfortunately, enforcement often becomes difficult because many of these individuals allegedly enjoy the backing of influential political figures.
Government Spending and the Need for Austerity
One issue repeatedly highlighted by economic experts is excessive government spending in Pakistan’s administrative structure, which has weakened the national economy over time.
Although the Prime Minister’s call for austerity is widely appreciated, many observers argue that such measures should not be limited only to emergency situations. If implemented consistently, they could strengthen Pakistan’s economy and reduce financial pressure on citizens.
Industrial Decline in Punjab
Economic challenges are also visible in the industrial sector. Currently, around 50 percent of industries in Punjab are reportedly closed.
Although industries in Punjab have been allocated 19,000 megawatts of electricity, only about 2,800 megawatts are currently being utilized. One reason is the high cost of electricity, which stands at Rs. 32 per unit, nearly double the rate charged in Sindh.
High energy costs discourage industrial production and investment, further weakening economic growth.
The Issue of VIP Culture
Another issue frequently criticized by the public is VIP culture and government privileges.
Pakistan’s federal cabinet consists of roughly 40 to 50 ministers and ministers of state, each receiving multiple official vehicles along with free petrol.
On average:
- Each minister receives around Rs. 400,000 per month in petrol expenses.
- Salaries range between Rs. 150,000 and Rs. 200,000, but most personal living expenses are covered by government facilities, including housing, electricity, transport, and travel.
When security vehicles and protocol arrangements are included, the cost per minister may reach Rs. 10 to 20 million.
Adding the expenses of the President, the Prime Minister’s Office, governors, senior bureaucrats, and protocol fleets, the monthly cost could reach Rs. 100 to 150 million or even higher.
These expenditures are funded through taxpayer money, raising legitimate concerns about fiscal discipline.
Taxation and Economic Responsibility
Pakistan also faces another structural challenge: many wealthy individuals do not pay taxes. This weak tax culture puts additional pressure on the national economy.
The Auditor General of Pakistan has repeatedly recommended reducing unnecessary government spending, but these recommendations often go unimplemented.
Strengthening the Economy Through Reforms
The Prime Minister’s recent speech included commitments to control VIP culture and unnecessary government expenses, steps that are widely appreciated by the public.
However, citizens hope these reforms will continue even after the current crisis ends.
The Ministry of Foreign Affairs and the Ministry of Finance should also review expenditures on Pakistani embassies and consulates abroad. Since these expenses are funded by public money, it is important to determine which departments are essential and which may be placing an unnecessary burden on the national treasury.
Pakistan’s economic future depends on strong financial discipline, transparent policies, and responsible governance.
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