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Thursday March 28, 2024

POL prices

By Editorial Board
July 17, 2021

It has hardly been a month since the national budget for 2021-2022 was passed, and yet again the government has increased petroleum prices in Pakistan. This is even more shocking if you keep in mind the country’s dwindling economy for the past three years. The government has increased petrol price by Rs5.4 per litre and high-speed diesel (HSD) by Rs2.54 per litre. The new price for petrol is Rs118.09 per litre, and for diesel it is Rs116.5. Similarly, the prices of kerosene and light-diesel (LDO) have increased by R1.39 and Rs1.27 respectively. The new price of kerosene is Rs87.14 and that of LDO is Rs84.67. Though some in the government have been trying to project it as a ‘huge relief’, in fact the burden this price hike will place on the people is enormous.

The Oil and Gas Regulatory Authority (Ogra) has been recommending price hikes every now and then, irrespective of the hardships people are going through. The fact that the PM does not allow as much surge in POL prices as suggested is no consolation for families, especially those belonging to the lower-income strata. Even if you account for rising petroleum prices in the international market over the last few months, this unprecedented hike does not appear justified because the government should not transfer to the public the fluctuation in the international market in this manner. Pakistan is one of the lowest ranking countries in terms of both human development and per capita income. Moreover, petrol and kerosene are two of the most fundamental commodities that have an impact on inflation in the country. Petrol increases transportation costs of essential commodities and kerosene is a primary domestic fuel in areas where natural gas is not available.

This is the second time the prices of petroleum products have seen an uptick in the past two weeks or so. If the government keeps doing this, it makes the entire set of budget promises redundant. At the time of the last budget presentation the government claimed that it was the ‘most people-friendly budget’; these repeated hikes in prices of not only POL products but other commodities too are a rather unfriendly reminder of the reality. The government is already collecting huge levies on the POL products that ultimately reduce the purchasing power of consumers. Keeping in view the financial constraints the people of Pakistan are encountering on a daily basis, it is essential that the government absorb the impact of increase by making adjustments in levies and taxes rather than increasing the burden on consumers.