Saturday Jun 18, 2022
KARACHI: Following an increase in petrol and diesel prices to revive the International Monetary Fund (IMF) loan programme, the weekly inflation — based on the sensitive price index (SPI) — surged 3.38% week-on-week and 27.82% year-on-year hitting a 14-year high during the week ended June 16.
According to the data released by the Pakistan Bureau of Statistics (PBS), prices of 71% of the commodities in the SPI basket shot up. The data showed that an increase was observed in the prices of:
It is worth mentioning that the joint impact of the increase in prices of these commodities was 2.53% in overall SPI for the combined group.
Read more: Inflation clocks in at 13.8% in May
Ismail Iqbal Securities Head of Research Fahad Rauf in his note attributed the hike in the SPI to a sharp increase in the prices of petrol, electricity, and chicken. “The quantum of increase has not been seen since the 2008 global financial crisis,” he said, adding that inflationary pressures would likely continue as electricity and gas price increases would also be announced soon.
“Based on current numbers, we expect June 2022 CPI (consumer price index) at 17.6%,” Rauf said, pointing out that the removal of subsidy on electricity announced under the prime minister’s package was not yet reflected in SPI readings. “If removal is incorporated, CPI would reach 19% year-on-year.”
According to the national price monitoring agency, hi-speed diesel (HSD) now stands at Rs264.17 per litre, up from Rs204.93per litre last week, and Rs113.57 per litre during the same period last year.
Meanwhile, petrol stands at Rs234.71 per litre, up from Rs210.63 per litre last week, and Rs111.68 per litre last year.
Since the coalition government took power, diesel price has surged by 82%, with petrol price up by 56%. During the week ended April 7, 2022, only three days before former prime minister Imran Khan lost the vote of no confidence, petrol was Rs150.63 and diesel was Rs144.9.
In the SPI basket, petrol weightage stands at 6.7%, while hi-speed diesel stands at 0.087% for the combined group. This rapid change in fuel prices has put huge pressure on the masses, particularly those from the low- and middle-income groups. Stagnant wages added to the woes.
It is worth mentioning that SPI is computed on weekly basis to assess the price movements of essential commodities at a shorter interval of time to review the price situation in the country. It comprises 51 essential items and the prices are collected from 50 markets in 17 cities of the country.
During the week, out of 51 items, prices of 36 (70.59%) items increased, six (11.76%) items decreased and nine (17.65%) items remained stable.
On a year-on-year basis, the increase was noted in the prices of: