Fuel prices to go up next month

Pakistanis should get ready to face an economic jolt, as the prices of petroleum products are likely to be jacked up between Rs 1.83 to Rs 3.60 per litre with effect from the start of upcoming month (October), it has been learnt.

Sources informed this scribe on Sunday that the government is set to increase the prices of petrol, kerosene, Light Diesel Oil (LDO) and High Octane Blended Component (HOBC), adding that while a slight slash is expected in the price of High Speed Diesel Oil (HSD). They said the Finance Ministry is not ready to decrease the ratio of Petroleum Levy (PL), so the already hard pressed consumers would resultantly bear this expected increase in the prices of POL products by next month.

Sources said that a surge of Rs 3.60 in petrol, Rs 2.10 in kerosene, Rs 1.83 in LDO and Rs 3.42 in HOBC has been calculated so far by the authorities concerned. Citing the recent increase in oil prices in the international market, the Oil and Gas Regulatory Authority (Ogra) is likely to send the summary of an increase to the Petroleum Ministry for POL products, the sources added.

Average crude oil prices in international markets have witnessed an increase by around $109 per barrel after August 26, 2011. Additionally, average prices of crude oil in international market have increased around $2.7 per barrel than to the prices of previous month.

Economic analysts when contacted warned about a flood of inflation in the market of commodities after this expected hike and an increase in transportation and production cost is possible. They said that already over burdened Pakistanis would face this severe jolt in the presence of long hour electricity and CNG load shedding in the country. They said in fact this decision was made in an apparent bid to pass on the partial impact of the consistently rising trend in international prices and contain the fiscal deficit within tolerable limits. The prices of most of the commodities and services would also increase in almost direct proportion to the rise in the prices of POL products in the domestic market. It is not hard to imagine the fallout of about 1to 4 percent jump in oil prices in a country, where the growth rate is already stagnant, poverty and unemployment is touching almost intolerable limits and inflationary pressures are accentuating, they argued. Further, they were of the view that Ministry of Finance should kept in mind the woes and worries of common man while setting the ratio of PL for the prices of Petroleum Oil and Lubricants (POL) products of the month of October, 2011.

It is worth mentioning here that petroleum products are the important source of any government's revenue and Pakistan is no exception. But the government levies are much higher than they ought to be and are the cause of high cost of POL products.