The rising cost of fuel has become part and parcel of everyday life, but the price jump that occurred on Monday, June 20 left Nepalis dumbfounded. The oil monopoly raised the prices of petrol and diesel by Rs21 per litre each and kerosene by Rs27, which was by far the steepest increase in living memory. Stagnant wages and increasing price rises have been a recurring feature for all and sundry ever since the easing of the pandemic. This has had a debilitating effect on economies expecting to bounce back after months of uncertainty.

With the recent hike, the price of petrol has reached Rs199 per litre, and diesel and kerosene now cost Rs192 per litre each. At a time when the government’s focus should be on increasing economic output, the recent hike will undoubtedly dampen economic activity. The steep rise in fuel prices could be attributed to the government’s desperation to raise internal revenue, which would otherwise be sourced from duty levied on imports. But the avenue of raising revenue from import duty has virtually come to a standstill. Therefore, the quickest and surest way to avail of the much-desired income lies in trying to squeeze every little penny from the unsuspecting public.

Constantly increasing fuel prices have a direct effect on the cost of essentials. And this fluctuation tends to jeopardise household budgets causing anguish to scores of people sustaining themselves from one paycheque to another. It is undoubtedly worse for people working on a daily wage basis. The current global crisis may be part of the problem, but the major reason is the pitiful state of our foreign exchange reserves, near negligible focus on exports over the years preceding the pandemic, and the rife unemployment resulting from the callous approach of successive governments to handling the economy.

The country has suddenly found itself in the middle of an economic meltdown, and policymakers have the nerve to shift the blame to the burgeoning global mess which reflects their ineptitude and indifference more than anything else. Knee-jerk measures to stem the outflow of foreign exchange have resulted in myriad internal problems for a country that has become so reliant on the fluid flow of imports. The pressure has since been mounting on the retailers and the feeble output sector, who have no other recourse than to meet the expected targets by relying on imports. But with other countries tightening exports of essentials, productivity can be expected to take a hit in the ensuing months adding to the existing anguish.

With national and provincial elections looming, one would think that the government would bring measures that would uplift the battered public morale by easing the financial burden. But the current steps initiated by our policymakers show astute political acumen and understanding of general psychology. It shouldn’t come as a surprise if the price hike is dialled down to more acceptable levels as we get closer to the elections slated for the end of November. The means to hold on to power by manipulating various instruments at their disposal is an old trick mastered over the years. What is necessary is sound economic policies with a medium- to long-term timeframe. Economic success does not happen on a whim; it requires utmost dedication, mainly from those at the helm of affairs.