Oil prices hit all-time high
ISLAMABAD: The PTI-led government dropped yet another bomb on poor Pakistanis by pushing gasoline and diesel prices to historic highs. It comes just a day after the government on Friday raised electricity tariffs to meet IMF demand, multiplying the plight of fixed and low-income households.
The government has increased the price of gasoline by Rs 10.49 per liter and the price of high speed diesel (HSD) by Rs 12.44 per liter. The price of kerosene was also increased by Rs 10.95 and that of light diesel (LDO) by Rs 8.84 / liter. On Friday, the government raised the electricity tariff by Rs 1.39 / unit after withdrawing the Rs 72 billion subsidy to resume the already blocked IMF program. The Fund advises Pakistan to tighten its belt to find a balance between the country’s income and expenditure.
After the rise in electricity and petroleum prices, another strong wave of high inflation can be expected to emerge as international commodity prices have skyrocketed, leading to an increase domestic prices, including those of petroleum products, edible oil and other products that we import.
The new gasoline prices as of October 16 are Rs 137.79 per liter, high speed diesel Rs 134.48 / liter, kerosene Rs 110.26 per liter and LDO is Rs 108, 35 Rs per liter. In percentage terms, the prices of diesel increased by 10.2%, gasoline by 8.29%, kerosene by 11% and LDO by 8.9%.
Also on Friday, the price of cooking oil and ghee jumped by Rs40 per liter / kg, reaching a peak price of Rs399 and Rs409 respectively. Conversely, a few days ago, Prime Minister Imran Khan and his Minister of Finance Jehangir Tarin declared that the prices of edible oil and ghee would be reduced.
According to the notification from the Directorate of Finance, oil prices [Global Benchmark Brent] on the international market had risen by around $ 85 a barrel, which was the highest since October 2018. said. The government has absorbed the pressure of increasing international rates and provided “maximum relief” to consumers by keeping the petroleum tax and sales tax to a minimum, the Finance Division said. He added: “Therefore, the prices established by the Ogra (Oil & Gas Regulatory Authority) have been approved.”
It should be noted that this is the second highest increase in oil prices since June 26, 2020, when the government increased the prices of gasoline by Rs 25.58 / liter, diesel by 21 , Rs 31 / liter, kerosene by Rs 23.50 / liter and LDO prices have gone up. per Rs17.84 / liter. In Pakistan, the consumption of diesel and gasoline is the highest and the government derives most of the revenue from them. On average, the monthly consumption of diesel is around 0.8 million tonnes, gasoline consumption is 0.75 million tonnes, kerosene is 11,000 tonnes and LDO is around 2,000 tonnes.
Comparing the current prices with the prices when the PTI took office in August 2018, the spot price of Brent oil in the international market was $ 72.5 per barrel and it has now fallen to around $ 85 per barrel ( an increase of $ 12.5).
In August 2018, the local market price of diesel was Rs 112.94 per liter, gasoline Rs 95.24 per liter, kerosene Rs 83.96 and light diesel (LDO) prices of Rs 75. , 37 Rs per liter. Now when the price of Brent is $ 85 / barrel, the price of gasoline is Rs 137.79 / liter, diesel is Rs 134.48, kerosene is Rs 110.26, and the price of LDO is Rs. from Rs 108.35 / liter.
Although the impact of the devaluation of the rupee against the US dollar cannot be reversed, current prices are the highest. Higher international oil prices would lead to higher transportation costs as well as energy-intensive industrial products such as metallic raw materials. As producers passed on the increased costs to consumers, this would increase the cost of Pakistani imports, leading to higher inflation.
Finance and Revenue Minister Shaukat Fayyaz Ahmed Tarin said on Saturday that the International Monetary Fund (IMF) would validate data and statistics on electric gas tariffs and tax collection. He was addressing a seminar at the Pakistani Embassy in Washington where he shared details of his meeting with the IMF director.
We are here to finalize our affairs with the IMF, he said. We asked the IMF to validate the data we shared with them. The minister said Pakistan has reached an agreement with independent power producers (IPPs), details of which will be announced in a few days. Tarin said the government had met its growth targets in various sectors and added that it had provided relevant details to the IMF. Tarin said her meeting with IMF Director Kristalina Georgieva was cordial and very positive. The minister said Prime Minister Imran Khan and his government were focusing on implementing economic reforms.
Pakistan has made sincere efforts to engage in economic reforms, he said. The IMF director appreciated Pakistan’s progress in implementing its program.
Tarin said he had met with the president of the World Bank, the US Pakistan Business Council. The finance minister said Pakistan will provide targeted subsidies to 40 percent of the population, adding that the government has compiled a database through which it knows the income of each household. We will provide subsidies on wheat, sugar and pulses, he said.
Regarding the current account deficit, he said it will remain stable and will not increase as in the past, he said, adding that it will gradually decrease if the exchange rate is adjusted. Tarin said the government maintained a market-based exchange rate.
The Minister of Finance underlined the government’s economic priorities by stressing that Prime Minister Imran Khan is committed to inclusive and sustainable economic growth that benefits all segments of society, especially the poor.
Meanwhile, the news of the unprecedented rise in fuel prices was met with a storm of political protests from across the spectrum of political parties.
PMLN chairman and opposition leader in the National Assembly Shahbaz Sharif demanded an immediate withdrawal from the increase in the prices of petroleum products.
Shahbaz Sharif called the increase in fuel prices and the recent 14% increase in the price of electricity as a continuation of the mini-budget. “The mini-budget says a lot about the economic failures of the current government. Imran Niazi should resign instead of killing people by raising inflation, because that alone would bring relief to the country and the nation, ”he said.
Shahbaz said the government pressed the blood of the people every day. “Despite obtaining concessional figures, Imran Niazi has completely failed to serve the country and the people,” he said. Recalling past statements by Imran Khan in which he linked rising inflation to a corrupt prime minister, Shehbaz said according to Niazi’s own recipe, now the prime minister is corrupt and such a person does not have the right to hang on to the post of Prime Minister.
PML-N Central Vice President Maryam Nawaz Sharif, harshly criticizing the government for the increase in oil prices, Maryam said the astronomical increase would impact all commodities, making the lives of citizens more wretched.
PPP President Bilawal Bhutto Zardari also strongly condemned the unprecedented increase in the prices of petroleum products and said: “the PTI puppet government” caused the tsunami of inflation in the country by driving up the costs of oil in the country. highest level.
“By increasing gasoline prices by more than Rs 10 / liter, the selected regime was actually making the masses pay for its incompetence,” he said while rejecting the unprecedented increase in oil prices. Bilawal Zardari pointed out that when PPP was in power, it in no way imposed such a burden on the public even when the costs of petroleum products in the international market were skyrocketing. “Only a people-friendly PPP government can save the nation from the current tsunami of inflation,” he said. He said that by making gasoline and diesel unbearable, Imran Khan has proven himself to be an enemy of the masses.
Former Senate Speaker, Senator and PPP leader Mian Raza Rabbani also condemned the increase in gasoline prices by Rs. 10.49 per liter and diesel by Rs. 12.44 per liter. He said that in September the prices of gasoline and diesel were increased by Rs 9 per liter. “As a result, commodity prices have skyrocketed and are now at an all time high,” he said. He said the government should withdraw this increase immediately because the people cannot bear this burden. “The ruling elite is forcing the common man to start committing suicide or revolt collectively and create a state of anarchy,” he said.
Citing the Pakistan Bureau of Statistics’ weekly report, he said the prices of 22 items, including tomatoes, potatoes, ghee, mutton and LPG bottles, have increased. “Under IMF conditions, the gas tariff is to be increased by 35 percent,” he said, adding that the US dollar is at the highest rate in Pakistan’s economic history, exceeding Rs. 172.
In his reaction, PMLN Punjab President Rana Sanaullah called on the masses to take to the streets against the current government. He said that it has become difficult for the popular class to live. “It is high time the people took to the streets against oppression, which will last as long as Imran Khan’s government lasts.
PML-N leader Rana Sanaullah said the electricity tariff was increased overnight, while today gasoline and diesel prices rose. The government has made the lives of citizens miserable, he added. Sanaullah said that the purchasing power of the people is decreasing day by day. “Imran Khan used to say he wouldn’t go to the IMF and would rather kill himself instead,” he said and called on people to come out and raise their voices against the incompetent government .
Defending rising fuel prices, the Prime Minister’s Special Assistant for Political Communication, Dr Shahbaz Gill, said fuel prices rose relatively less in Pakistan than in the world.
Responding to Bilawal Zardari’s statement, he said oil production declined during the corona pandemic, resulting in a supply and demand problem. He said Brent crude oil prices were at their highest for 70 years. Oil prices have fallen from $ 37 a barrel to $ 85 in the past year, he said. Gill said crude oil prices continue to rise in the world market. Food prices were also at their highest for 10 years, he said. He said that currently the whole world is going through a serious crisis and called the incompetent opposition to make propaganda only for their survival, he said.