Pakistan government hikes petrol prices again

May 1st, 2008 - 3:58 pm ICT by admin  

By Muhammad Najeeb
Islamabad, May 1 (IANS) Pakistan’s new government Thursday hiked petrol and diesel prices, for the second time since it took over March 30, triggering angry reactions from the people who said it would lead to a major increase in prices of commodities. The government increased prices of petroleum products by Rs.3 a litre for the next 15 days following a surge in international prices.

“We thought the new government will bring some relief to the already hard-pressed people, but this increase is going to ruin our businesses,” Rafiq Shah, an official of the Rawalpindi Transport Association, told IANS.

Petrol prices have increased from Rs. 65.81 to Rs. 68.81 a litre, and diesel prices from Rs.41.59 to Rs. 44.59. According to government statistics, the inflation rate in April was 18.6 percent - the highest since 2003.

A committee under the Oil and Gas Regulatory Authority (OGRA) reviews petroleum prices every fortnight - on the 14th and the last day of every month - based on the international market rates.

“People are committing suicides due to poverty and hunger. On the one hand, the government is increasing the prices of petroleum, and on the other, its leadership is holding talks in Dubai,” said Raza Iftikhar, a student of economics at Quaid-i-Azam University.

Last week, Finance Minister Ishaq Dar said petroleum prices may increase by Rs.20 to meet the international prices. However, he said parliament would take a decision on the matter and the government could increase subsidy instead of passing on the burden to the people.

“Many poor countries like ours have not increased petroleum prices but our government is bent on crushing the people,” said Shoaib Choudhary, a former parliamentarian.

He said people are disturbed over the increase as it would raise the prices of commodities of daily use, transport fares and even building material. “Increase of Rs.6 in a month is huge and cannot be justified,” he said.

Oil prices are at a high of $120 a barrel.

However, the government says that even after the latest hike, the subsidy on diesel is still very high. A finance ministry official said that on May 1, the subsidy on diesel stood between Rs.18 to 20 a litre. There is no subsidy on petrol, but its rate is being revised upward time and again with other petroleum products on the basis of cross subsidy formula.

He said the government has not increased kerosene prices primarily to protect the poorer people.

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in South Asia |