Oil prices increased to enormous ratio in Pakistan
By Shama Faisal - Pakistan Times Staff Correspondent

KARACHI: Vehicle-owners as well as hard-up travelers with the poorer class of people, totally dependent on kerosene oil as the only source of cooking their meals to live-on, received an all-out jolt when the prices of oil and oil-related liquids were increased by a self-governed body, the OCAC in Pakistan on Wednesday.

The increase in price-list shall eventually adversely affect every-one, irrespective of ones’ status, yet the lowed-paid, salaried class and exclusively the underprivileged sets of the society, as the rise in price index of oil shall eventually fetch another wave of price-hike, which is already swelling and remains unchecked, said consumers through phone calls to print and e-media sets-up including ‘Pakistan Times’ after receiving the news of OCAC decision, expressing their distress with agony.

As a communiqué of the review of oil price-index committee says that the fortnightly meeting of the relevant sub-committee of Oil Companies Advisory Committee (OCAC) met in Karachi Wednesday ‘for evaluation of the prices of various petroleum products’ and announced price rise in different petroleum-made products across the country—with immediate effect.

New Prices

The Oil Companies Advisory Committee notified the revised maximum ex-depot sales price at 29 designated locations effective from today, December-16, 2004.

In the coming 15 days with rise of Rs 2.58 per liter, the petrol shall be sold at Rs 39.50, high octane 43.73 per liter with rise of 2.86 per liter and kerosene oil in Rs 25.50 per liter with rise of Rs 1.50 per liter and light diesel oil Rs 22.41 per liter with rise of 1.36 per liter.

On the other side, oil marketing companies too have increased rise of Rs 1.59 per liter of diesel oil, selling at Rs 25.96 per liter.

The OCAC statement said; in order to shield the consumers in general and low income segment in particular from the unprecedented increase in international price of oil, the government of Pakistan had frozen the domestic prices of petroleum products since May-1, 2004.

In doing so it had taken so far a budgetary hit of Rs 33 billion. These costs not only include the loss to PDL but also is further subsidy on account of price differential claims of then Oil Marketing Companies and Oil Refineries.

The Reasons

The statement contended that it is to be noted that if price had been adjusted in accordance with the international oil prices, the domestic prices of petrol and diesel would have been Rs 40.63 per litre and Rs 32.29 per litre respectively, that is, 10% and 32.5% higher than the current prevailing market prices.

Though the international prices of petroleum products have eased a little bit since its peak in October 2004 it, nevertheless remains substantially higher than May, 2004 prices.

Recent information including the statement from OPEC ministers indicate that oil prices will continue to remain firm in the months to come.

The government of Pakistan stated "fiscal prudence demands that we review the policy in order to protect not only the federal budget 2004-05 but also the development budget, which has a far reaching beneficial impact for the economy as well as for the people".

It is in this perspective that the government of Pakistan has decided to pass on a small fraction of the additional cost to the general consumer effective December-16, 2004.

'This measure, the government of Pakistan feels, will have a marginal impact on the consumer as well as on the economy', the statement viewed by adding; that 'the government will however continue to absorb substantial cost.'

New Prices

The New Ex-depot Sale Prices, effective from today, December-16 are:

The price of high speed diesel would be subject to a separate announcement by individual oil marketing companies.●