POL prices surge by 5pc to 9pc

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Sunday dropped the petrol bomb on inflation-stricken 170 million people of the country by increasing the petroleum products by 5 per cent to 9 per cent with massive increase in motor gasoline (petrol) by Rs 6.10, from Rs 65.11 to Rs 71.21 per litre, HOBC (High Octane Blending Component) by Rs 7.41, to Rs 86.84 from Rs 79.43 per litre, with immediate effect from today (Monday, February 1, 2010).

In its notification released late on Sunday night, the Ogra also increased the price of High Speed Diesel (HSD) by Rs 3.33 per litre to Rs 71.99 per litre from Rs 68.56, kerosene by 5 per cent from Rs 60.75 to Rs 64.07 per litre, Light Diesel Oil (LDO) by 5 per cent to Rs 61.07 from Rs 58.10 per litre.

The whopping increase would multiply economic miseries of the masses as the transportation cost of the goods would inflate manifold and, therefore, the inflation would surge. However, the increase in POL products would bring relief for the current regime, which is struggling a lot to increase its revenue generation to meet the target of Rs 1,396 billion as agreed with the International Monetary Fund (IMF), as the sales tax collection would increase.

The price increase of kerosene will inflict huge monetary losses to the people living in the far-flung areas, especially in the Northern Areas, where natural gas and even Liquefied Natural Gas (LNG) is not available.

However, the government remained indifferent to the unscrupulous owners of petrol pumps, who closed their sale from Sunday evening till midnight to capitalise on the illegal windfall profits by not selling the stocks, which the owners had purchased at old prices.

The increase in diesel will also bring financial miseries to the farmers’ community. The country is facing over 30 per cent water shortage, which has further aggravated because of the four-month drought. Now the farmers would have to use the ground water through tubewells, which are mainly operated through diesel, where the electricity is not available because of the massive power outages.

The federal government has linked the local prices with the developments in the international oil market and has been passing the impact to the domestic prices accordingly. The Arab Gulf petroleum product prices showed steep increase during the month of January 2010, and, therefore, the Ogra notified the revised prices of petrol, HOBC, kerosene and LDO upward w.e.f February 01, 2010.