Saturday June 11, 2022

Petrol, Diesel Price Hike Pushes SPI to More Than 3-year high

KARACHI: Weekly inflation rose close to 3 percent week-on-week, hitting a more than three-year high after government raised petrol and diesel prices to seek IMF approval for continuing Extended Fund Facility programme.

The fresh hike put more pressure on middle and lower income groups that have already been struggling with massive spike in prices of essential items.

Pakistan Bureau of Statistics (PBS) data showed that sensitive price indicator (SPI) inflation jumped 2.67 percent WoW and 23.98 percent year-on-year during the seven-day period ended June 9.

Analysts said the spike in inflation was expected on the back of increase in prices of both petrol and diesel. Consumer inflation would now go up further than expected, they added.

Increase was observed in the prices of hi-speed diesel (17.18 percent), petrol (16.61 percent), potatoes (7.01 percent), tomatoes (6.15 percent), vegetable ghee 1kg (3.62 percent), eggs (3.30 percent), fresh milk (2.51 percent), pulse gram (2.31 percent), vegetable ghee 2.5kg and curd (2.02 percent) each, onions (1.96 percent), cooked daal (1.66 percent) and cooking oil 5 litre (1.45 percent). The joint impact of these changes was 2.99 percent in overall SPI for the combined group.

Topline Securities CEO Mohammad Sohail said, “SPI went up sharply after 60 rupee rise in petrol and diesel prices. This was expected. Now CPI for June will also be high; likely up to 17 or 18 percent.”

PBS data showed that last high of 2.89 percent in WoW SPI was recorded during the week ended October 18, 2018, when the base year was 2007-08.

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 of 51 essential items and the prices are collected from 50 markets in 17 cities of the country.

“The trend of this index is monitored regularly by the NPMC (National Price Monitoring Committee), and immediate measures are being taken to control fluctuation in prices. The SPI YoY basis in FY2022 remained volatile,” the Economic Survey 2021-22 noted.

During the week, prices of 33 items increased, 5 decreased, and 13 remained unchanged.

The annualised increase in SPI during July-April FY2022 was recorded at 16.9 percent against 12.9 percent in the same period last year. Twenty-five major food items including wheat flour, rice, tomatoes, onions, pulses, chicken, sugar, and red chilies, having a weight of 59 percent, influenced SPI by 10.6 percent, the survey noted.

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