One swallow does not a spring make. Though news of oil prices tumbling by six percent is certainly a welcome respite from its consistently upward trajectory, there are some false hopes being nurtured in the hearts of consumers within the country and without, that the worse is now over.
The drop in price isn’t because of a fundamental shift in the reasons for the current global price hike, mainly the war in Ukraine. It is actually being attributed to a fall in aggregate demand caused by a hiking of interest rates throughout the world in an attempt to fight inflation. With excess liquidity being siphoned off on to take advantage of the higher interest rates, the decrease in economic activity has led to the corresponding decrease in oil prices.
Even this small respite is a double edged sword for us here in Pakistan. Because a decrease in consumption would also hurt our export prospects.
The last government (before the PTI) to have had to deal with exorbitant oil pieces was the PPP government of ‘08-‘13. Prices back then were higher in dollar terms than they are now. Correspondingly, fuel prices in Pakistan were also high, leading to much political fallout for the then government. When the League followed in 2013, lower fuel prices practically fell into their laps. Yes, the then petroleum and natural resources minister Shahid Khaqan Abbasi might have deftly executed the LNG contracts, but the lower prices weren’t to his credit, but merely a result of international prices of crude oil. The public did not mind.
Well, that good luck had left a debt for the League in the cosmic balance and it has come back to collect with interest at just about the worst possible time. Yes, the PPP is still a coalition member but as far as public perception, and actual cabinet portfolios, are concerned, this is the PML(N)’s problem.
