The increase in petroleum prices would have immediate as well as long term impact on inflation, said former finance ministers. Talking to Business Recorder, Former Finance Minister, Sartaj Aziz said that increase in petroleum prices would further fuel inflation in the country consequent to higher transportation cost. Aziz said that petroleum prices in Pakistan have been relatively higher because the government has been collecting heavy amount of taxes to meet expenditure.
The previous governments had been providing relief to the people by reducing taxes on petroleum prices when petroleum products prices go beyond a specific limit. He said that the government decision to fix the prices of petroleum products on weekly basis has created difficulties for the masses. Sartaj Aziz said that persistently double digits inflation in the country during the last four years was a result of economic mismanagement of present government. In reply to a question, he said that there is no quick fix to the solution and a range of measures are required to be taken to minimise expenditure and increase revenue to improve the fiscal situation and macroeconomic framework.
Another former finance minister, Hafeez Pasha was of the opinion that the diesel is a basic input of public transport and goods transportation service and increase in its price would result in higher transportation cost. This, he said, would increase the prices of essential commodities as well as input cost of manufacturing sector. The input cost of agriculture sector would also go up with the increase in diesel price, which would have direct bearing on the price hike of essential commodities.