Petrol soars by Rs8.02, diesel by Rs4.70 per litre
The staggering hikes are expected to trigger a nervous breakdown and backbone-breaking inflation in the country that could cause nationwide violent protests, particularly in the urban areas of the Punjab and Sindh where urban-based political parties such as the PML-N, PTI and MQM are exceedingly sensitive to increases in the price of POL products, CNG and power tariffs.
The hike is also expected to raise political temperatures, and the party that fights for the inflation-stricken masses will definitely maximise its vote bank prior to the next general elections.
The incumbent regime is also ready to face the music in the upcoming elections because of its ‘prudence’ to deal with all economic issues — particularly the issue pertaining to the price of petroleum products, CNG and power tariffs.
The country’s poor, destitute masses who have braved a reduction in their purchasing power parity by 65 percent in the last four years because of the stagnation in the GDP growth will be exposed to more vulnerability; the middle class, meanwhile, on account of the tremendous pressures it is facing from incessant double digit inflation, is being pushed to the ranks of the lower middle classes.
With the increase, the government is likely to pocket Rs25 billion in the month of April in the form of heads of GST and petroleum levy, an FBR official revealed to The News. "On account of GST, the government will earn Rs18 billion and Rs7 billion because of the petroleum levy," the official, speaking on condition of anonymity, said on Saturday. "Compared to the month of March, the government will have an additional Rs1.5 billion revenue as more GST will be collected because of a hike in POL prices — so much so that the government will earn Rs27 billion gas development surcharges in the month of April."
As per the official notification, the price of petrol has been hiked by Rs8.02 per litre to Rs105.08 per litre, high speed diesel has increased by Rs4.70 per litre to Rs108.10 per litre, High Octain Blending Content (HOBC) has shot up by Rs8.94 per litre to Rs135.81 per litre, kerosene oil has jumped by Rs5.29 per litre to Rs101.69 per litre, and Light Diesel Oil (LDO) has skyrocketed by Rs5.45 per litre to Rs98.74 per litre.
The government has increased the price of high-speed diesel by Rs4.70 per litre, therein reneging on its earlier announcement of extending the subsidy of Rs8 billion it announced on diesel for four months till June.
A month ago, Federal Minister for Water and Power Naveed Qamar disclosed that the government had decided to provide a Rs8 billion subsidy on diesel to maintain its price at the existing level, and in March the government even gave a Rs1.8 billion subsidy, but to everyone's surprise, from April 1 the government is refusing to provide the subsidy and has instead increased the price of HSD, which is heavily used in power houses and for the transportation of all goods - particularly kitchen items. In other words, this means that in the future power tariffs will not only increase because of the hike in diesel prices, but the price of kitchen items will also go up, bringing about another deadly spate of inflation.
The Oil and Gas Regulatory Authority (Ogra) has massively jacked up CNG prices by Rs9.93 and Rs11.58 per kg from April 1 by imposing a 20 percent gas development surcharge and increasing the gas price by 20 percent.
The price of CNG has increased alarmingly by almost 110 percent to Rs88.70 per kg from Rs31 per kg in 2008.
Under the notification, Ogra increased CNG prices in Region-I (KP, Potohar and Balochistan) by Rs11.58 per kg owing to which the new CNG price in Region-I now stands at Rs88.70 per kg.
In Region-II (Sindh and Punjab), the government has increased the price of CNG by Rs9.93 per kg to Rs80.89 per kg.
Meanwhile, Central Chairman of All Pakistan CNG Association Ghiyas Abdullah Paracha has strongly rejected the exorbitant increase in CNG prices. In a press release, he said that an All Pakistan CNG Association CEC meeting has been called to review the situation.
He said that this increase is illogical and unacceptable, adding that it serves to invite a storm of inflation and will ignite fire in the hearts of the masses: "Countries all around the world are rapidly adopting CNG fuel while we are going to ruin ourselves," he charged. "CNG consumers have already been disturbed by unjust three-days loadshedding, and now this price hike is no less than a bomb for them," he added.
The CNG sector, which is paying the highest tariff, has been facing severe gas loadshedding three days a week, facing low gas pressure for another two days, while being burdened with incessant power outages during the remaining days.
