Govt drops another petrol bomb

ISLAMABAD The government while turning down Ogra’s proposal to maintain prices of petrol and diesel has dropped a bombshell at the masses by jacking up POL products prices by up to Rs5.13 per litre with effect from Dec 1.

The cash-strapped government on Wednesday decided to hike per litre price of light diesel oil (LDO) by Rs4.79, high speed diesel (HSD) oil by Rs4.67, Kerosene by Rs3.48 and Jet Fuel (JP1) by Rs5.13, for December. After this massive hike, according to Ogra, the new per litre price of petrol has swelled to Rs87.89, LDO is Rs86.78, HSD to Rs98.82 and Kerosene to Rs89.42.

It is to note here that the price of gulf crude oil (Arab light crude oil) has witnessed an increase from $105 to $116 per barrel despite decline in the price of high-octane blended component in global market, however by increasing petroleum levy by Rs1.73, it has been decided to maintain the price of high octane. Sources also told The Nation that though hike has been witnessed in the price of petrol in global oil market at the rate of 32paisa during the said span of time, however, Oil and Gas Regulatory Authority (Ogra) has adjusted rise in petrol prices through inland freight equalisation margin (IFEM) and recommended the government not to pass on any price increase burden of diesel the highest used fuel for transportation to so as the consumers are not over-burdened. Though Ogra in its proposal has sought to reduce the duty on HSD in a bid to maintain the price of HSD but the finance ministry has declined to entertain Ogra’s plea in the monthly revision of the prices of POL products. 

They informed that finance ministry has soared up the petroleum levy of 42paisa and a PL of 65paisa on HSD while Rs1.49 increase in the price of per litre HOBC; resultantly PL on petrol after approval from the finance ministry has surged from Rs9.52 to Rs9.94, on HSD it has now increased from Rs4.44 to Rs5.09 and PL has also been soared up from Rs6.13 to Rs7.62 per litre.

Economic pundits when contacted have argued that this surge in POL prices would unleash a new tsunami of price hike for Pakistanis and would also make the mobility literally unaffordable for commoners. Furthermore this fresh hike in oil prices will surly push up the overall inflation and will also make it all the more harder for the common man to meet both ends.

The fresh increase in POL price will eventually affect everybody regardless of their status but it will especially affect the salaried class and the underprivileged sections of the society. There will be further increase in inflation by the risen prices of oil products, and our industrial production will face more hindrances, which are already under the adverse effects of gas and electricity shortage. However, the fresh increase in prices of petroleum products will also unleash a massive spell of price spiral, further burdening the people who are already unable to bear the existing inflation.