‘Lowered fuel prices to bear results with time’

ISLAMABAD: The full impact of the eight per cent reduction on petroleum products will be visible once provincial governments take up the issue, according to Federal Minister for Petroleum Syed Naveed Qamar. He said it was a principle of economics that prices go up very fast but go down slowly. The Oil and Gas Regulatory Authority (Ogra) announced on Monday that the price of petrol had been reduced by Rs6.04 per litre and that of diesel by Rs1.8 per litre. The minister said the government is discussing further measures to reduce prices as well.

Qamar said that Ogra determined prices by keeping the market and average prices of the last month in view, and the ministry had nothing to do with this. However, he said even Ogra could not randomly choose price as it only monitors and calculates prices.

With the system linked to the international market, he said, it is not possible to fix prices for a year as it would either lead to big profits or heavy subsidies.

Most transport runs on diesel and there is very little downward change in its price, just Rs1.20, however, if the same downward trend continues next month in the international market, diesel prices will go down further, he said.

Published in the Express Tribune, June 4^th, 2010.