ISLAMABAD: The Petroleum Division, playing down the massive petrol price hike announced on Friday, said the new rates were "to the people's benefit".
The Division said the step was taken after a 112% surge was witnessed in the international market during the last 46 days, and the early announcement will ultimately save the people from what would have been a further increase in July.
“The government increased the rate just by 25% as it sought to give maximum relief to the masses under the vision of Prime Minister Imran Khan,” Minister for Power and Petroleum Omar Ayub Khan said Saturday, while addressing a press conference in Islamabad along with Special Assistant to the Prime Minister on Petroleum Nadeem Babar.
“When the petroleum prices decreased in the international market, the benefit was passed on to the masses. Now, when the prices have witnessed a sharp increase, a substantial relief has also been given to the common man, with an increase of just 25% against 112% in the world market,” he said.
He said fuel prices in Pakistan, being a non-oil producing country, were comparatively low, not only in the sub-continent, but in all of Asia.
Meanwhile, Babar said that the government had issued the revised rates four days earlier this time, as rates would have gone up more than Rs25 after July 1, leading to a bigger burden on the people.
"According to our calculations, in the light of the current exchange rate, an increase of Rs31.5-Rs32 will take place on July 1 as a new cargo is set to be unloaded," he said.
On the advice of the prime minister, the finance ministry had issued a notification with the new rates for 35 days, which will ultimately mean losses to the OMCs (oil manufacturing companies), Babar said.
Talking about the recent petrol crisis, the premier's aid said: “OMC’s are licensed to set aside a reserve of 21 days. Several of them had reserves for 15 or 12 days only, and PSO had stock for 18 days."
He said that the Oil and Gas Regulatory Authority (OGRA) had been asked to take action against the companies who had fewer reserves and that PSO was advised to import more of the commodity.
Shedding light on how to rectify the menace, he said: “There are three elements which can bring a halt to the crisis. First and foremost, OGRA should be strengthened and it should revoke the licenses of the companies who don’t have ample stocks for 21 days. We are working to have that enforced.”
Currently, there are more than 9,000 registered and over 1,500 illegal pumps — who have no agreement with any OMC, he said.
"Due to the huge difference in prices between the global and local markets, some illegal pumps and OMCs had illegally hoarded the commodity. The oil companies had it stored in their facilities but did not provide it to the pumps," he said.
Babar said that a crackdown against hoarding and illegal pumps would remedy the fuel shortage.
Ayub thought it pertinent to mention that in PML-N’s tenure, the rate was increased from Rs75 to Rs108, which was an increase of 31%, and they were already earning through taxes as rates in the global market were not that high at the time.
Govt approves massive hike
A day earlier, Prime Minister Imran Khan had the price hike "in view of the rising oil prices trend in the global market", causing a furore in the National Assembly today, with the opposition demanding the premier's resignation.
A notification to announce the new rates stated that the new petrol prices would come into effect immediately.
Petrol prices, according to the recommendation, were to be bumped up by Rs25.58 per litre. Similarly, the prices per litre of high-speed diesel, kerosene oil, and light diesel oil were recommended to be increased by Rs21.31, Rs23.50, and Rs17.84, respectively.