2012 began inauspiciously for the Pakistani consumer, what with the hike in gas prices being accompanied by one in petrol, oil and lubricants, both taking effect on New Year’s Day, both increases creating not just a direct burden on the consumer, but also an indirect one, as the prices of other goods too will be moved. In other words, prices across the board will rise. These price increases will not be proportionate to the increase in transport costs, and will not be rolled back if oil or gas prices go down. One of the main components in the gas tariff’s increase is the gas development surcharge that will now be levied, while the fuel prices are supposed to be going up because of the Inland Freight Equalisation Margin, as well as the fall of the rupee against the dollar, for global oil prices have been falling, and the current rise should have actually been a decline. However, the consumer has not been given any relief, but has been subjected to another increase where he has already experienced many, and where he cannot afford any more.

It must be realized that the price is not the only problem with gas, but also availability. With CNG stations about to be shut down, moving people as well as goods, both within cities and between them, will grow to be very expensive, and the switchover made by many vehicles to gas, even if it was jerry-rigged and at the cost of safety, will not just mean an investment thrown  away, but also a rise in costs. Coming at this point in the year, not only will the prices of agricultural inputs go up, but so will the cost of moving them. That means that prices for food will go up, and that too for a consumer who is paying more to get to work. This will lead to a series of wage demands which will only mean that the value of the rupee will fall. If exports are affected, there will be further devaluation, which will only lead to further fuel price hikes, and thus greater inflation. In short, a vicious cycle of devaluation has been created.

The government must not forget it must face an election in a few months, even if opposition demands for fresh polls to be immediately conducted, are ignored. Such crippling double blows win it no favour among the electorate, and must not be carried out merely to satisfy the international lending institutions. The government still controls the prices, and must reverse both steps. It is not as if it does not have any precedent. The government should not ignore the fact that, apart from other things, if the inflation issue was solved, most of the steam in the movement against it would be removed.