Hike in fuel prices challenged in LHC

Judicial Activism Panel (JAP), a non-governmental organisation (NGO), has filed a civil miscellaneous application in the Lahore High Court (LHC) challenging the recent decision by the federal government to increase the prices of petroleum products.

The petition, submitted by advocate Azhar Siddique, claimed that the government's move has resulted in an artificial shortage of petrol in Lahore, leading to public protests against distributors, retailers, and petrol pump owners.

Finance Minister Ishaq Dar announced a significant increase in petroleum prices on Tuesday, with high-speed diesel (HSD) seeing a staggering increase of Rs19.90 per litre, reaching Rs273.40 per litre. Additionally, petrol prices were hiked by Rs19.95 per litre, now standing at Rs272.95 per litre. Minister Dar justified the price hike, citing rising international market rates over the last 15 days.

The government had attempted to work on the Oil and Gas Regulatory Authority's (OGRA) recommendations to minimise the price increase but faced difficulties in doing so.

Consultations between Dar's team, OGRA, and petroleum division officials continued until the early hours of Tuesday, leading to a delay in the price announcement. However, despite efforts to reduce the impact, a significant increase was inevitable.

Read more: Petrol, diesel become dearer by almost Rs20

Moreover, the petition said that the government recently announced a 17.5 per cent increase in the producer price of Liquefied Petroleum Gas (LPG) and a 13.5 per cent rise in the LPG consumer sale price for August.

The government faced challenges in announcing such major price increases, especially as it approaches the end of its term.

The NGO said in its petition that the government's decision to increase the standard General Sales Tax (GST) from 17 per cent to 18 per cent as part of its "mini-budget" to reduce the budget deficit and enhance tax collection has also drawn criticism.

The Federal Board of Revenue (FBR) aimed to generate approximately Rs115 billion through this tax increase, with an additional Rs55 billion through other measures.

Furthermore, the oil marketing companies are unable to import petroleum products due to difficulties in opening Letters of Credit (LCs) to supply the remaining 3,800 retail outlets. The petitioner stated that the industry officials have warned that the crisis could be prolonged due to the lack of dollars in the market to import petroleum products, potentially exacerbating the situation.

In light of these developments, the petitioner has urged the court to intervene and set aside the prices of petroleum products, which are claimed to be inconsistent with international market rates that have been decreasing rapidly.