LAHORE: The Pakistan Tehreek-i-Insaf (PTI) and its ally PML-Q have strongly condemned the increase in petrol prices at a time when the poor masses are already facing 50 years of the highest inflation under the government of incapable Pakistan Democratic Movement (PDM) leaders. They called the increase in prices the launch of a “petrol bomb” on the masses.

In a tweet, PTI Chairman Imran Khan chided the PDM government, saying that the corrupt and incompetent imported government’s complete mismanagement of the economy had crushed the masses and salaried class with the latest hike in petrol and diesel prices and the Rs33 per dollar devaluation to Rs262.6 per dollar.

“Electricity and gas price hike as well as 35 per cent unprecedented inflation expected with Rs200bn mini-budget,” he tweeted.

Former chief minister Chaudhry Parvez Elahi said Ishaq Dar raised petrol prices by Rs35 per litre to give a `gift’ to Maryam Nawaz on her return from London.

“The credit for increasing petrol prices goes to Nawaz Sharif and Maryam Nawaz,” he said, adding that the monster of inflation had gone out of control, while the PML-N government was busy victimizing PTI and PML-Q leaders.

In a series of tweets, Mr Chaudhry said the law and order had been shattered and the crime rate was increasing, besides the poor situation of governance in the province. He said job opportunities, created due to development projects, were also vanishing.

“Unemployment will increase in the government of Mohsin Naqvi,” Mr Elahi stated.

Stating that the price hike has gone out of control, the former chief minister said the country was heading towards default. He said the nation had rejected the imported government rulers, who had forced the masses to fall into the death trap of poverty.

Meanwhile, Mr Elahi spoke with former interior minister retired Brig. Ijaz Shah, who paid him a visit at his residence, about the country’s political situation and deteriorating economic situation.

In a media talk at Zaman Park, PTI central Punjab president Dr Yasmin Rashid strongly condemned the massive increase in petrol prices and called it a “petrol bomb”. She demanded that the increase be withdrawn forthwith.

Asserting that the PDM government was continuously robbing the masses of their hard-earned meager income, Dr Rashid said PML-N leader Maryam Nawaz, soon after landing in Pakistan, urged the masses to have trust in Ishaq Dar, who in return increased petrol prices by Rs35 per litre.

“The PDM is bound to collect Rs600 billion on the instructions of the IMF,” she said adding that the government was shifting the burden onto the masses while not decreasing the strength of the 75-member federal cabinet.

She said even the PML-N leaders, workers and supporters were criticising Dar but Ms Nawaz praised him just because he was her close relative.

The PTI’s central Punjab president predicted further increases in petrol and other commodity prices, saying the country had enough reserves for imports in the next three weeks. She also regretted that the government was not opening LCs for the import of raw materials for the manufacturing of life-saving drugs. “We are holding peaceful protests and will continue protesting,” she asserted.

INFLATION CONTROL POLICY: The government has been urged to revisit its inflation control policy, which is tailor-made for economies facing demand-pull inflation and not for the economy of Pakistan, which is cost-push.

The suggestion was made at the 6th World Islamic Economics and Finance conference by Dr Hussain Mohi-ud-Din Qadri, deputy chairman of the board of governors of Minhaj University Lahore on Sunday.

The moot was attended by business and finance experts from USA, Australia, UK, Qatar, Turkiye, Bahrain, Oman and Kazakhstan.

Dr Qadri argued that Pakistan’s financial managers’ perennial approach of increasing exports of the country through devaluing the local currency instead of actually investing in the production of goods was the root cause of the inflation issue as the measure would work only for a short time but would mount foreign debt pressure.

To tackle this pressure, the government would resort to tightening the taxation policy, which in return causes inflation, he added.

He said the policy of increasing the interest rate to combat inflation is not effective in Pakistan, which experiences cost-push inflation due to hikes in taxes and energy prices.

The interest rate hike policy did not work even in economies with developed inclusion systems like USA, Europe and Japan, while in Pakistan only 21 per cent people have bank accounts, many of which are also dormant, he said.

“Not every economic policy is meant for every country and governments need to amend a policy in accordance with its given environment.”

Instead of going to world donors, which impose their own conditions with the credit, the government should resort to open market operation in the form of sukuk and other bonds as it could be more beneficial than relying on enhancing the policy rate, he suggested.

Dr Qadri said the Pakistan government needed to merge the policy rate with other tools for stopping the decline of the rupee and reducing power bills to make the local industry competitive in the world markets.

He said Islamic economics offers solutions to overcome inflation, including reforms to the monetary system by eliminating all forms of interest and implementing a fiscal policy with other instruments to maximise Zakat collection and optimise its utilisation, charging fees on idle funds, and using the principle of revenue sharing in every transaction.

Published in Dawn, January 30th, 2023