Govt drops petroleum bomb

Petrol to be sold at Rs137.79; diesel Rs134.48 per litre

ISLAMABAD:

The government on Saturday announced a massive increase in the prices of all major petroleum products, citing soaring energy prices in the global markets in the wake of the post-Covid economic recovery worldwide.

The hike of around Rs9 to Rs12 per litre in the fuel prices of petrol, high-speed diesel (HSD), light diesel oil (LDO) and kerosene oil is bound to increase inflationary pressure on the common man, who is already facing spiralling prices of different commodities.

The ruling Pakistan Tehreek-e-Insaf (PTI) made major increases in the prices of two petroleum products –petrol and the HSD – that are widely used by the general public. Effective Saturday, the HSD went up by Rs12.44 per litre and petrol by Rs10.49 per litre.

There had been crisis in different countries due to increase in prices of coal, gas and crude oil. Due to higher prices of coal, India had curtailed electricity supply to different states. China had also faced problem due to higher prices of coal.

Pakistan is also producing some portion of electricity through coal as share of this fuel in power sector had increased, following imported coal-based power plants set up under the China-Pakistan Economic Corridor. Therefore, increase in coal prices would also impact the prices of electricity in Pakistan.

On Friday, the world oil prices exceeded $85 a barrel that was the highest rate since October 2018. Pakistan being a net importer of petroleum products was directly impacted by the soaring oil prices globally.

The government announced the increase in fuel price in a statement issued by the Finance Division. Accordingly, petrol – which is used in cars and motorbikes – will now be sold at Rs137.79 per litre against the earlier price of Rs127.30 per litre.

The price of HSD – which is widely used in transport and agriculture sectors – has been increased from Rs122.04 per litre to Rs 134.48 per litre. The price of kerosene oil went up by Rs10.95 to Rs110.26 from Rs99.31 and the LDO by Rs8.84 per litre to Rs108.35 from Rs99.51. The LDO is used by the industry.

The kerosene oil is commonly used at homes in far-flung areas of the country, mainly the northern parts of Pakistan. The people living in these areas use it for cooking purpose as liquefied petroleum gas (LPG) is not available.

After the shortage of gas, use of petrol had increased. A gas “crisis” is already looming over the country as the Pakistan LNG Limited (PLL) and the Pakistan State Oil (PSO) had failed to arrange the required LNG to meet domestic demand for the winter season.

The PLL had floated a tender to import the commodity to meet the requirements in the winter months. However, no LNG trader had participated in the bid because of the higher prices in the world markets.
Therefore, demand for petrol was likely to increase if the government curtailed the supply of gas to the CNG stations in the country.

Read Pakistan offers competitive petrol prices: Cheema

The government had already announced prioritising gas supply to the fertiliser, export sectors and domestic consumers.

The Finance Division said in the notification that at present, the world oil prices had risen to around $85 a barrel and the “entire energy chain prices have witnessed a strong surge in the past couple of months due to higher demand for energy inputs and supply bottlenecks”.

“In the current scenario, the government has absorbed the pressure and provided maximum relief to the consumers by keeping petroleum levy and sales tax to minimum. Therefore, prices worked out by Ogra [Oil and Gas Regulatory Authority] have been approved.”

Reaction

After the government announced a massive increase in the prices of petroleum products, major political leaders and common Pakistanis were in a fit of rage over it.

Soon after the announcement, top political leaders and opposition parties condemned the government's move, demanding Prime Minister Imran Khan's resignation.

PML-N President Shehbaz Sharif termed the increase as “utterly shameful”, saying that the latest petrol bomb will push people to the brink of starvation.

“No words to describe the extreme cruelty this selected PTI regime has inflicted on the people in the form of yet another increase in prices of items of daily use,” Shehbaz said.

The PML-N president said PM Imran Khan has no right to remain in office and demanded his resignation.

“PM Imran’s resignation could provide some relief to the nation,” the PML-N leader said, adding that “mini budgets” are proof of the incumbent government's economic failures.‘Tsunami of inflation’
On the hike in petrol price, PPP Chairman Bilawal Bhutto Zardari said that the PTI government has brought a “tsunami of inflation” in the country.

“The government is actually charging people for its incompetence. During the PPP era, the burden of rising petroleum prices and products in the world market was never shifted to the masses,” he said in a statement.

“Only PPP’s people-friendly government can save the country from the tsunami of inflation,” he added.
Bilawal said increasing the price of petrol a day after the hike in power tariff proves “Imran Khan is an anti-people prime minister”.

He asked the people to support the PPP to get rid of the government which is pushing Pakistan into the mire of inflation.