ISLAMABAD - Since the government is arguing that the increase in the recent phenomenal POL price is due to following the international market, yet the Pak rupee depreciation against the US dollar is appearing to be a major reason behind this callous move.
The government is believed to have manipulated the new phenomenal price-hike of petroleum products (POL) and told the common public that the hike is only because of the prevailing trend in the international oil market.
However, the experts have said that hike is only due to heavy decrease in the value of Pakistani rupee against US dollar while the PML-N government is silently watching persistent freefall of ostensibly orphaned Pak rupee which on Tuesday traded as low as 105.6 against US dollar in the inter bank.
The value of Pakistani rupee is losing like anything.
The rupee became volatile and exchanged at the lowest rate in the inter bank after incurring substantial losses. The rupee hit a rock bottom level as Pakistan’s currency surrendered the gains owing to the resurging demand of dollars to some extent.
Following the strong criticism from common public and Parliamentarians over recent massive hike in the prices of petroleum products (POL), the representatives of the incumbent regime started chanting a different mantra blaming the fluctuating trend of crude oil prices in international oil market as the sole reason behind the gigantic hike in oil prices.
The government was of the stand that since the impact of increase in global oil market has been passed on to the consumers so this hike was necessary.
Govt jacked up the prices of POL products upto Rs 5.57 per litre, which were already very high.
Due to the decision of giving hike in the prices of petroleum products, petrol price has gone up by Rs 4.12 per litre, kerosene by Rs 2.14 per litre, diesel (HSD) by Rs 4.69 per litre, light diesel by Rs 2.83 per litre and High Octane Blended Component (HOBC) by Rs 5.57 per litre.
With this massive hike, the new per litre price of petrol has reached at Rs 113.25 per litre, HSD at Rs 116.95 per litre, LDO at Rs 101.24 per litre, kerosene at Rs 108.13 per litre and HOBC at Rs 143.90 per litre.
Economic pundits have disclosed that the abnormal declining trend in the value of Pakistani rupees has played a significant role in giving colossal hike in the prices of petroleum products (POL).
The recent hike is not in line with the fluctuating trend of crude oil price in the international oil market.
They further lambasted the government policies in this particular reference, stating that this increase is of Rs 2.91 per litre, and Rs 5.57 per litre increase in the price of High-Octane Blended Component (HOBC), used in luxury cars, is because of the decrease in the value of Pakistani rupee.
About the recent decrease in the prices of oil products in neighbouring India, an economic expert argued that it was not related with Pakistan’s oil products as every country has its own buying procedures.
Interestingly, if we follow international market than the oil prices of Diesel (High Speed Diesel), which is mostly used in cargo and passenger vehicles as well as in agriculture, was to decrease by 25 paisa, Light Diesel Oil (LDO), which is mainly used for industrial purposes, by 50 paisa while the per litre price of Kerosene oil, which is consumed for cooking in remote areas where Liquefied Petroleum Gas is not readily available, to remain intact with no change.
On Monday, the Oil and Gas Regulatory Authority sent a summary of oil prices to Ministry of Petroleum for final approval.
The POL prices were determined by the Oil Marketing Companies (OMCs) and Ogra in its recommendation proposed no change in the prices.
As per Ogra’s summary, petrol was to be costlier by Rs 5.45 per litre, kerosene by Rs 2.14 per litre, diesel (HSD) by Rs 2.63 per litre, light diesel by Rs 2.83 per litre and High Octane Blended Component (HOBC) by Rs 5.57 per litre. But the government made slight changes in the price of petrol and diesel and increased the Petroleum Levy (PL) on diesel.
When contacted with businessmen, they said that the government was doing nothing to shore up the nose-diving rupee the consequences of which could be dire for the economy of Pakistan.
Viewing the upward trend in the value of US dollar against Pakistani rupee and the way the market is moving, we could easily see further depreciation of Pakistani rupee against US dollar.
They also said that depreciation of Pakistani rupee against US dollar began in 2008 and the decrease in Pak rupee has nearly stopped economic growth in all major spheres of the economy.
The widening current account deficit, excessive bank borrowing, absence of foreign flows, increasing oil imports, lack of foreign investment and repayments to the International Monetary Fund have become the vital reasons for constant depreciation of Pak rupee, they added.