ISLAMABAD: The Pakistan Industrial and Traders Associations Front (PIAF) has warned the government of any further hike in the already record highest rates of oil prices at the end of the month, calling for providing subsidy in line with the rest of the world.
PIAF senior vice chairman Nasir Hameed and vice chairman Javed Siddiqi observed that it would be disastrous for the trade and industry to escalate petroleum rates for the second time in a single month, which is already beyond the access of the public.
Nasir Hameed said that it is unfortunate that on 15th of this month, the government had dropped a big bombshell on the people by increasing the price of petrol by Rs12.03 per litre due to an increase in the prices of crude oil in the international market.
We understand that the prices of petroleum products are showing a drastic increase in the international market and presently are at the highest level since 2014 but the solution is not to increase the rates and put whole burden on the masses. The government should also share some burden like developed countries are doing to favour their public, he demanded. We appreciate that despite the unabated increase, since the beginning of the year, Prime Minister Imran Khan deferred the last review of petroleum products’ prices on January 31, 2022, and advised against the summary of OGRA.
In view of the soaring prices of Brent crude in the international market amid the Ukraine crisis, the rates of petroleum products in Pakistan are expected to increase further which should be avoided by announcing subsidy, Javed Siddiqi suggested.
It is pertinent to mention here that the global oil prices broke past $100 and safe havens surged while equities tumbled after Russian President Vladimir Putin announced a military operation in Ukraine. Oil prices increased more than 5% with Brent moving within spitting distance of the $100 not seen since Sept 2014.
But as petroleum product prices began to soar, many governments came under political pressure to shield consumers from price hikes. According to a recent survey of pricing policy for gasoline, diesel, kerosene and patrol in 65 developing countries, two-thirds have kept domestic prices below market-based levels for one or more fuels, subsidizing consumers. Two-fifths have frozen the retail prices of gasoline, diesel, or both to provide favour to their consumers.
Javed Siddiqi observed that this hike in fuel rates would lead to increasing cost of production and cost of doing business as well. He argued that the high cost of doing business is hindering Pakistan in achieving its export target. Nasir Hameed said though the prices of oil in global market are fluctuating yet the authorities can keep the rates stable by reducing tax ratio.
Javed Siddiqi said that the government is using petrol and HSD products as a tool to generate most of the revenue because of their massive consumption.
Total HSD sales are touching 800,000 tons per month against monthly consumption of around 700,000 tons of petrol. The sales of kerosene and LDO are generally less than 10,000 tons per month.
The post PIAF advocates for subsidy on oil to adjust world rising prices appeared first on The Frontier Post.