- At present the inflation rate is at 28%, says energy ministry official.
- Govt already under pressure due to power bills, says official.
- LC confirmation charges embedded in price of petroleum products.
ISLAMABAD: Oil and Gas Regulatory Authority (Ogra) is likely to recommend a hike in the petroleum products prices for the upcoming two weeks due to recent increases in global oil prices as well as a depreciation in the value of the rupee against the US dollar, which has reduced the exchange rate impact by Rs12.
From September 1, 2023, it is anticipated that the cost of gasoline will increase by Rs. 12 per litre and the cost of diesel by Rs. 14.83 per litre.
“This would put the masses at risk of an additional spike in inflation, making their lives even more miserable. According to a senior Energy Ministry official, the inflation rate is currently 28%.
The official continued, “However, the government, which is already facing enormous pressure due to nationwide protests over the inflated electricity bills, may reduce the increase or stop it.”
But doing so would put the caretaker administration in a difficult situation.
“If the government takes that action, it will be deemed a breach of the terms and conditions of the IMF’s $3 billion standby agreement (SBA) loan, which requires the government to pass price changes for POL products.
The dollar has a value of Rs301.75 in the interbank market and is currently selling for about Rs319 in the open market, according to the official.
According to the data, the cost of gasoline has already increased by Rs. 37.50 over the course of August, while the cost of diesel has increased by Rs. 40 per litre.
“However, the authorities last time worked out the POL prices at the value of the dollar at Rs287 and now they have decided to calculate the prices of POL products from September 1, 2023, at Rs299.
“The big impact of the exchange rate of Rs12 will be reflected in the hike in POL prices.
“The LC confirmation charges that have increased by 10% are also embedded in the price of PSO petroleum products,” the Energy Ministry official told
The News.
“The current price of Mogas is Rs290.45 per litre, but that price could increase by Rs12 per litre to Rs302.45 per litre. The price of HSD, which is currently Rs. 293.40 per liter, is also anticipated to rise by Rs. 14.83 per liter to Rs. 308.23 per liter.
Because diesel fuel is primarily used in trains, tractors, trucks, buses, and agricultural engines like tube wells and threshers, it has a significant inflationary impact on food prices, driving up the price of vegetables and other eatables in particular.
On the other hand, petrol is also mostly used in private transport, small vehicles, rickshaws and two-wheelers and directly affects the budget of middle and lower-middle-class citizens.
SOURCE: GEO NEWS
