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Tuesday Jan 31, 2012

Petrol, diesel, CNG, LPG prices go up

ISLAMABAD: The government and LPG producers on Tuesday dropped three bombshells on consumers by increasing the price of oil products. Petroleum Oil Lubricants (POL) prices were raised from Rs3 to 6.29 per litre, a 10 per cent infrastructure development surcharge was levied on compressed natural gas (CNG) and the LPG price was raised by Rs14 per kg with immediate effect from today (February 1, 2012).

Experts had already predicted that people would be exposed to more surges in inflation on account of a surge in POL prices following the US-Iran tension over the strategic Straits of Hormuz. The State Bank of Pakistan has also hinted that the government may miss the GDP target. “When GDP growth is on the decline and the purchasing power of the common man has eroded manifold, such a hike in the prices of POL, CNG and LPG is unjustified,” Sohail Abbas, a government official residing in I-9/2 said.

A housewife Khalida Imtiaz added: “Our incomes are fixed, but there is no one who can control unbridled inflation. It seems that we are being punished for living in Pakistan.”

People complained that the power tariff had increased to Rs12.25 per unit during peak hours and Rs6.70 during the lean period and there were reports that the peak hour tariff would further increase to Rs15 per unit and lean hours tariff to Rs9.50 per unit. The diesel price increase would be the main reason for inflation as the transportation of all goods, including kitchen items, was by diesel run vehicles.

Ogra on Monday sent a summary to the federal government recommending a hike in petrol price by Rs5.37 per litre, HOBC by Rs6.29 per litre, High Speed Diesel by Rs4.64 per litre, kerosene oil by Rs2.78 per litre and light diesel oil by Rs3.73 per litre.

The finance ministry has increased the petroleum levy of Rs1.32 per litre owing to which the total petroleum levy has swelled to Rs6.50 per litre of diesel. As per the hike of POL prices in the global market, the price of high-speed diesel is to be increased by Rs3.11 per litre.

As per the Ogra notification, the new price of petrol would be Rs94.91 per litre, of HOBC Rs118.20, HSD Rs103.46, kerosene oil Rs92.09, LDO Rs90.21 per litre. The new rates will come into effect from today (February 1, 2012).

It is pertinent to mention that Ogra had advised the government to reduce the petroleum levy on POL products to maintain the prices with zero increase, but the cash-starved finance ministry has refused to honour the recommendations of the regulator.

The government also imposed 10 percent infrastructure development surcharge on CNG, owing to which the new CNG prices would stand at Rs74.29 in KPK, Balochistan and Potohar region and Rs69.60 in Sindh and Punjab.

When contacted, Secretary Petroleum and Natural Resources said that the government had imposed 60 percent infrastructure development surcharge on gas, but the CNG associations went on countrywide agitation. “The government, in consultation with the CNG association, thus reduced 10 percent development surcharge and decided that it would be imposed later.”

The government has levied the 10 percent surcharge now. He said that the government is committed to increase the infrastructure development surcharge by 100 percent. The 60 percent increase has been implemented and the remaining 40 percent will be increased in phases and keeping in view the formula of maintaining parity of CNG price to 55 percent of petrol - the demand of the CNG association.

On top of it, LPG producers also increased LPG price by Rs14 per kg, owing to which the price of domestic cylinders has swelled by Rs165 and commercial cylinders by Rs660. LPG is used in areas where piped gas is not available, particularly in northern areas. The poor masses in rural areas where poverty is on the rise also mostly use LPG.