Thread by @Abidsuleri

1/9) 🧵
On #PetroleumPrice hike:
#Fuel prices r giving headaches both to ppl & govt of #Pakistan. Former are finding it difficult to cope with #food & #fuel inflation; the later despite losing PDL & GST #revenue, finding it difficult to reduce the impact of expensive #fuel import

2/9) Quicker than expected increased demand for #energy amidst #Covid19 has triggered 🌎energy prices. coal 🇿🇦, Brent crude, & gas prices increased by 150%, 102% & 500% since Aug 2020.

3/9) Depreciation of value of #rupee against #US$ is also turning imported #fuel more expensive for us. But then artificially stabilising (thru SBP intervention) value of rupee has its own implications

4/9) From Jan2007 to March2008 prices of #oil doubled from US$55 to US$110/barrel. Against that 100% increase in prices, the then govt increased domestic prices by 9% only and that is the origin of our #EnergyCircularDebt which has reached to Rs 2.8 Trln in last 14 Yrs.

5/9) While protecting the population on lowest 50% income quintile through targeted #energy #subsidies & enhanced #socialprotection, govt should pass on #global fuel price impact to rest of the domestic #consumers.

6/9) In addition it should expedite efforts to increase the share of renewables in #Pakistan’s #energy mix. This is the only sustainable solution to reduce dependency on #FossilFuel

7) On geopolitical front some #US opinion makers r blaming #Pakistan for #Afghan forces’ surrender to #Taliban (see my last🧵on Bloomberg editorial). In this context #IMF ll not give us any waiver (for not fully recovering cost of energy). But we need IMF EFF for various reasons.

8/9) So far #Pakistan’s #petrol prices are much lower than many of its peer #economies. Pl compare urself. globalpetrolprices.com/gasoline_price…

This approach is not sustainable. It is time to take some pragmatic decisions (targeted subsidies, going for renewables).

#Gasoline Price comparison (in Pak rupees per litre) with many developing and LDCs.