ISLAMABAD: The federal government has passed on the partial impact of 112 percent increase in international crude oil prices and widening rupee-dollar parity.
This was stated by Special Assistant to the Prime Minister Nadeem Babar in a joint press conference held, here on Saturday.
He said that the price of petrol was increased by 25 percent, and high-speed diesel's (HSD's) by 21 percent, which was the lowest as compared with other foreign countries.
In a joint press conference with Federal Minister for Energy Omar Ayub, he said that the government managed to pass on albeit partially, 21 to 25 percent impact of increasing international crude oil to general masses out of recorded 112 percent in last 40 days' surge by spreading it over 35 days from June 26 to July 31.
He said the rate of PSO's cargo off loaded on May 18 was $21.7 per barrel, which was reached $44.54 per barrel on June 20.
He said the Oil and Gas Regulatory Authority (OGRA) verified the PSO rates, and sent the summary to the Petroleum Division, which was approved by the Finance Division.
He further said that the actual price increase was calculated at Rs31 to Rs32 but the government opted to pass on only Rs 17 per litre and Rs21 per litre on petrol and diesel, respectively.
Refuting the allegation that the June 26 announcement was made to benefit the Oil Marketing Companies (OMCs), he said the OMCs were still facing inventory losses under the 35 days spread.
He further said that the rules and procedures prescribed under the OGRA Ordinance would be strengthened through amendments to avoid the incidents of hoarding and artificial petrol shortage in future.
The amount of fine on OMCs failing to meet licenses' obligations would be increased.
He further said that in the recent petroleum products' shortages, PSO had to import 78 percent additional oil, and its market share also increased during the shortage of petrol period in June.
Unlike previous government of Pakistan Muslim League (N), which increased the GST to 71 percent in March 2016 and kept the PL at Rs8 to 10, the PTI government fixed the GST at 17 percent and capped the limit of PL.
Responding to a question, he said that the PL rate was kept on higher side to cover the quantum revenue collection loss in GST.
He said the government will evolve a mechanism, which will enable Oil & Gas Regulatory Authority (OGRA) to receive daily sale data from oil sale departments and OMCs' outlets to keep a check and balance.
"The sale data from sale depots will be completed shortly but collectional data from outlets requires a few months' time," he added.
The whole purpose of the practice to collect real-time data is to help check the recent claims of OMCs that the sale of petrol increased by 52 percent in first 10 days of June as compared with June 2019, and it increased 32 to 33 percent in June 27, 2020 as compared with June 27, 2019. "It is not realistic," he added.
He said the district administrations were also tasked to inspect physically the active 9,000 legally registered outlets of OMCs.
According to an initial investigation 1,500 outlets were found using unauthorized signboard of OMCs, he said.
The government of KP, he said, sealed around 60 "fake" OMCs outlets.
Talking about the refineries, he said that indigenous oil production could meet only 30 to 40 percent of total fuel consumption of the country, if refineries utilized 100 percent capacity.
But only one upgraded its plants while the rest were running on 55 percent capacity. He said the government initiated a dialogue with refineries in March.
Omar Ayub said the petrol prices in Pakistan were still the lowest in the Sub-continent by a wide margin.
He said Prime Minister Imran Khan was committed to providing relief to the public, therefore, the government has not increased the prices in accordance with international trends.
The minister vowed unwavering fight against "mafias" to pass on relief to the public according to the manifesto of the PTI. He said every possible legal action would be taken against the beneficiaries of oil shortage in the country.
Copyright Business Recorder, 2020
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