Days after ‘historic’ relief package, Pakistan jacks up petroleum prices to record high

ISLAMABAD: The Pakistani government on Thursday increased the prices of petroleum products by as much as Rs8.14 per liter, days after Prime Minister Imran Khan announced a “historic” $700 million relief program to mitigate the impact of surging commodity prices. 
Pakistan fixes the rates of petroleum products on a fortnightly basis to pass on the impact of the fluctuating international prices to consumers. 
The price of petrol has been increased up by Rs8.03 to Rs145.82, while that of high-speed diesel by Rs8.14 to Rs142.62 per liter. Similarly, kerosene oil has gone up by Rs6.27 to Rs116.53 and light diesel oil by Rs5.72 to Rs114.07 per liter. 
Reviewing the proposals worked out by the Oil and Gas Regulatory Authority (OGRA) and the Finance Division on November 1, the prime minister had not agreed with the proposed hike and directed authorities to maintain the petroleum prices, according to the Finance Division. 
But the premier, in his address with the nation two days later, had cautioned that fuel prices would undergo an increase in the coming days. 
“It is pertinent to mention that maintaining the 16 October 2021 petroleum prices had some underlying concerns for e.g. cash flow issues due to the short recovery of the cost,” the Finance Division said in a notification. 
“It is important to note that in the previous petroleum prices, already a significant relief was provided to the consumers.” 
The statement said the government was “cognizant of its responsibility to provide maximum relief to the consumers,” which had dented the petroleum levy budget of Rs152.5 billion during July-September, as compared to Rs20 billion realized only. 
It said the petroleum prices had been increased partially, compared to rates proposed by OGRA. “In fact, the government has absorbed the bulk of the pressure after making adjustments in the sales tax and petroleum levy.” 
The new prices have already taken effect. 
The increase in petroleum prices comes days after PM Khan announced the “biggest welfare program in Pakistan’s history” to mitigate the impact of surging commodity prices due to the global price hikes and rising inflation. 
The prime minister’s announcement came as the statistics bureau said that Pakistan’s annual inflation rate rose to 9.2 percent in October, compared with 9 percent in the previous month and 8.9 percent in October 2020. 
The subsidy is expected to provide relief to 20 million families, or 130 million people, offering them a 30 percent discount on per unit purchases of three basic edible items: ghee, wheat and pulses for six months.