The relief provided to the people of Pakistan during the Covid-19 pandemic in the shape of reduced petrol price appears to be short-lived as the federal government on Friday hiked its price by Rs25.58 to Rs100.10 per litre for the month of July 2020.

The sources said that the real impact of the increase in the price of petrol was Rs31 per litre based on the data and working of the Pakistan State Oil (PSO). However, the government decided to increase its price by Rs25.58 per litre with immediate effect.

They said that the Finance Division had moved a summary to the Petroleum Division for consultation. It is interesting to note that the Oil and Gas Regulatory Authority (Ogra), which usually handles the matter of revision in petroleum prices, did not move the summary.

After consultation with the Petroleum Division, the government decided to increase the prices of petrol and other products, which is likely to have a huge impact on the lives of the people already hit hard by the coronavirus-induced lockdowns.

The price of petrol has been increased from the existing Rs74.52 to Rs100.10 per litre.

Further, the price of diesel has gone up to Rs101.46 per litre from the existing Rs80.15, relfecting an increase of Rs21.31. This fuel is used in the agriculture and transport sectors, therefore, increase in its price would affect these sectors and inflation would likely go up.

The price of kerosene oil has been hiked by Rs23.50 to Rs59.06 per litre from the current Rs35.56. It is used in remote areas where LPG is not available for cooking purpose.

The price of light diesel oil (LDO) has also gone up by Rs17.84 to Rs 55.98 per litre from the current Rs38.14. This fuel is used by the industry.

After the increase, the government will continue charging Rs30 per litre petroleum levy on petrol and diesel, Rs6 per litre on kerosene oil and Rs3 per litre LDO.

The federal government had reduced the price of petrol by Rs7.06 per litre and its ex-refinery price by Rs11 per litre for the month of June.

The oil industry had been demanding a freeze on the prices of petroleum products till June 15 in a bid to avoid losses because the government had reduced petrol and its ex-refinery price for June that had resulted in the worst petrol crisis across the country.

Following the reduction, the oil marketing companies (OMCs) had reduced supplies to retail outlets and the burden was shifted on PSO. Ogra took action and imposed Rs40 million fine on the OMCs and cases were also registered against heads of two oil firms - Hascol and Go. The FIA is still conducting inquiries against these oil firms.

The PSO has faced multibillion-rupee loss due to increased supply in the market to overcome the petrol crisis in June. However, those oil firms which had hoarded stocks, would make billions of ruppes after the hefty increase in the oil prices for the month of July 2020.

© Pakistan Press International, source Asianet-Pakistan