ISLAMABAD: Two senior government officials on Saturday defended the decision to increase the price of all petroleum products in the country, saying that the government had tried to provide relief to the people amid rising international prices.
Addressing a press conference with Special Assistant to the Prime Minister on Petroleum Division Nadeem Babar, Petroleum Minister Omar Ayub Khan said that prices in the international market had risen by 112 per cent over the last 40 days.
In a sudden move on Friday evening, the government had increased the prices of all petroleum products by up to nearly Rs26 to share the impact of rising international prices with the consumers.
The price of petrol (motor spirit) was raised by a whopping Rs25.58 to Rs100.10 per litre from the existing Rs74.52, an increase of 25.6 per cent.
During the press conference, Babar explained that the government set the prices of petroleum products on the basis of Pakistan State Oil’s (PSO) monthly average. Like other government functionaries, he highlighted that Pakistan had the lowest prices among South and Southeast Asian countries.
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 (OMCs) 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 (OGRA) 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].
“At this time, there are 9,000 legal registered petrol pumps, which means they sell oil at some OMC level whereas there are 1,500 or more illegal pumps which have no agreement with any OMC. The government will crack down on these.
“Because the price had risen to very high levels in the international market and the price here was very less, companies started hoarding. This is why committees conducted raids. We have to get rid of this once and for all. We will change rules and laws and take administrative action against illegal pumps. It is unfair that the government cannot provide relief to the people when it wants to.”
Khan criticised the PML-N and alleged that when an investigation was instituted during the PML-N’s tenure, the [then] finance minister called Investigation Officer Tariq Khosa to his office and asked him to stop the investigation.
“The PML-N gave protection to these mafias. On the contrary, the premier’s stance is to break the back of and end these mafias and to go to the very end to do so.”
Earlier in the day, Information Minister Shibli Faraz tweeted that the pandemic had affected all economies of the world. “Such an increase in international prices has not been seen which is why we had to review our prices too.
“There has been less increase in Pakistan as compared to other countries in the region. Benefit of the people is our first priority and we will continue trying to provide them relief.”
