Whether it be because of the war in Ukraine, the resultant political problems with Russia, or the global economic down-turn in general, Petrol prices are shooting up across the globe. It is not the first time that we have faced crises due to the price of oil on the market.
However, on the heels of a global pandemic and a period of hyper-inflation the likes of which have not been seen before, the current petro-crisis is causing yet more inflation and problems for people across the globe. Whether it be those directly affected by the crises-for example those that have to commute to work or school, or those effected indirectly through the knock-on effects of the price-hikes, there is a very small chance that someone has not been affected negatively by the hike in prices across the board.Â
There are a few problems that are quite visible with the current trend in hiking prices due to petrol-firstly it exposes the extent of our dependence on fossil fuels just to survive.
Despite efforts across the world for many years, and there being existing technology that is both cost-effective and good for the environment that can replace tech requiring fossil fuels, we are still very much dependent on the very thing that is killing our planet. Not only is man-made climate change causing world-wide catastrophes currently within our lifespans, but it is also destroying the many eco-systems that have survived the constant onslaught of a capitalistic society.
Furthermore, even the mankind that is highly dependent on the fossil fuel for its existence is constantly being squeezed by the ones that control the supply. Price-gauging on behalf of oil companies and their affiliates has skyrocketed post pandemic. Though whenever asked, these companies state that the supply of oil has dried up and so the hike in prices make sense.
Shell chief executive Ben van Burden said the war in Ukraine had caused “significant disruption to global energy markets”.
“The impacts of this uncertainty and the higher cost that comes with it are being felt far and wide.
“We have been engaging with governments, our customers and suppliers to work through the challenging implications and provide support and solutions where we can.”
But that is not the truth of the matter. A price-hike when oil is in low supply would mean that companies’ profits would either go down or be unaffected (if the price-hike was reflective of the inflation in oil prices on their end) and yet these companies have actually recorded immense profitability during these times.
An example of this is the fact that Shell, one of the largest petro-suppliers on the planet, reported unprecedented levels of profit in the middle of the current oil crisis. In the first quarter of 2022, Shell reported a tripling in profits. It was 9.12 Billion Dollars US in the first quarter of the year, compared to the 3.2 Billion Dollars US in the same quarter last year.
However, as transparent as this is, the common man does not really have a sway with oil-companies or governments owned by oil-companies (Or governments that are in of themselves Oil Companies).
So what can we do?
How to Survive a petro-Crisis?
As a Pakistani there are a few things that can be done to try and survive a time where the majority of the middle-class is going to be erased from existence. After this, it is quite possible that the former middle-class is going to become the lower-middle and lower-class (economically speaking) of the country. This is because the government has stopped a substantial amount of subsidization of petrol. Considering that most of Pakistanis have either returned to commuting to work or school, the rise in prices makes it next to impossible for the common man to afford petrol for their cars, afford services like Uber, Careem, or even Bykea. That is not to include the subsequent knock-on effects this will have on the price of every-day goods, and the extreme price-gauging that is the norm for any kind of service provider or goods seller in the nation.
So what can be done?
Commuting and Public Transport
Public Transport is the only viable answer to the problem of expensive commutes.
One of the saddest parts of the pandemic was the shutting down of ride-sharing services like Airlift and Swvl. These services would have been the best solution for the upper-middle and middle-class of office-goers who had previously been dependent on single-passenger or car-pool services like Careem. For example, after the most recent price-hike in petrol (30 rupees) prices of rides almost doubled for peak hours.
In Karachi, a bike ride of 20km (30-1 hour commutes) has shot up from under 250rs to almost 500rs. This has doubled the monthly expense for most office workers within a few days. Not to talk about car rides that used to cost 400-500rs going up to no less than 900rs for the same distance and duration.
In contrast, a public bus (takes less space on roads, more fuel efficient per capita) will take you 25 kilometers for less than 100rs. Considering that there is bound to be more and more people of the middle-class accepting longer commutes and less comfortable rides for a considerable price-cut, this would be the prime-time for private and public bus services to begin their services to and from commuting hotspots.
In the mean-time, individuals can look towards car-pools and ride-sharing on a private level to cut their costs in halves and quarters.
Subsidization Burdens and Taxation
The other main issue is how the burden of subsidization happens. This is directly on the policy-maker’s level. The average man can look to cause change on the local level by looking for policy-makers (voting in, or pressuring) that can direct taxes the right way. Passing on the cost to sales taxes on basic goods harms the lower-class the most whilst leaving the rich untouched. Taxing luxury items and real-estate and wealth leads to less burden on the common man.
The other thing is for a reversion to the Work from Home, Study from Home models. This not only cuts the commute costs but is shown to also increase productivity on a large-scale.
Lastly, the government has to crack-down on undue price-gauging on the behalf of big businesses at least on the local level that harm the lower-class the most.
Shifting to Other Energy Sources
This works on the larger scale. Many solar systems have already been successfully adapted both in Pakistan and across the globe that not only reduces burden on the national grid but also increases energy efficiency across the grid as well. Producing energy through these methods rather than fossil fuels and using electric vehicles rather than fossil fuel-run ones would go further to reduce our dependency on oil for our future.
The biggest example for this are the Nordic countries reliant on geo-thermal energy that have been able to avoid rising energy costs in contrast with the US and Europe (and most of the world) that are reliant on fossil fuels instead.
The price of petrol is supposed to rise till 290rs this summer in Pakistan. Unless drastic change is made both culturally and on a larger scale, things might get too difficult for a large portion of the population to survive.
