Staff Reporter
Islamabad
The government on Saturday sought to play down the massive hike in petrol prices announced a day earlier, with the Petroleum Division saying the new rates are “to the people’s benefit”.
The Division said the step was taken after a 112% surge was witnessed in the international market during the last 46 days, and the early announcement will ultimately save the people from what would have been a further increase in July.
“The government increased the rate just by 25% as it sought to give maximum relief to the masses under the vision of Prime Minister Imran Khan,” Minister for Power and Petroleum Omar Ayub Khan said, while addressing a press conference in Islamabad along with Special Assistant to the Prime Minister on Petroleum Nadeem Babar.
“When the petroleum prices decreased in the international market, the benefit was passed on to the masses. Now, when the prices have witnessed a sharp increase, a substantial relief has also been given to the common man, with an increase of just 25% against 112% in the world market,” he said.
He said fuel prices in Pakistan, being a non-oil producing country, were comparatively low, not only in the sub-continent, but in all of Asia.
During the press conference, Nadeem Babar explained that the government set the prices of petroleum products on the basis of Pakistan State Oil’s monthly average. Like other government functionaries, he highlighted that Pakistan had the lowest prices among South and Southeast Asian countries.
“The price of petrol is Rs180 in India, Rs108 in Indonesia, Rs153 in the Philippines, Rs159 in Thailand and Rs196 in Japan,” he said, adding that the government had continued passing on the effects of falling prices to the public.
Giving an “example”, he said that on February 28, before the pandemic started, petrol was priced at Rs116.60 and diesel cost Rs127.24. On June 1, the price was reduced by Rs42. He added that the government, despite its “lesser purchasing power”, was trying to charge as less as it could.
Clarifying why the government had announced the new fuel prices on June 26 instead of July 1, he said that according to calculations, if the “last cargo was priced at the current rate, there would be an increase of Rs31-32”.
“We didn’t want to do this,” he said, adding that by increasing prices now, the government had reduced the total increase by spreading it over 35 days. “This means all the oil marketing companies will also face a minor loss in July [but there will be] net benefit for consumers.”
Referring to the oil crisis, Babar claimed that the reason behind it was “hoarding by certain OMCs”.
“Nearly all OMCs did not have stock of 21 days as per licensing agreements; PSO had an 18-day stock too. Not only did we repeatedly ask the Oil and Gas Regulatory Authority to issue notices to these companies, but also asked PSO to import more to fill this gap.
“Unless Ogra is strengthened and enforcement capability made so strong that it takes action against companies not keeping proper stocks, this is likely to happen again,” he cautioned. “[The government] will change rules and if needed then act itself [to ensure this does not happen.
