By Haneen Abbas
Islamabad: As Oil prices climbed to a three-year high above $85 a barrel in International market on Friday, boosted by forecasts of a supply deficit in the next few months as the easing of coronavirus-related travel restrictions spurs demand, government of Pakistan increased prices of petroleum product significantly.
Imran Khan-led federal government increased the price of petrol by Rs10.49 per litre and that of high speed diesel (HSD) by Rs12.44 per litre.
According to a notification issued by the Finance Division, the new price of petrol, effective from Oct 16 (today), is Rs137.79 per litre while high speed diesel will sell for Rs134.48. Meanwhile, the prices of kerosene and light diesel oil (LDO) were increased by Rs10.95 and Rs8.84 per litre respectively. The new price of kerosene is Rs110.26 per litre and that of LDO is Rs108.35 per litre.
It is worth noting that 0il prices settled at a three-year high above $85 a barrel on Friday, boosted by forecasts of a supply deficit in the next few months as the easing of coronavirus-related travel restrictions spurs demand.
It Brent crude futures settled up 86 cents, or 1%, at$84.86 a barrel. Front-month prices, which touched their highest level since October 2018 at $85.10, hit a weekly rise of 3%, its sixth straight weekly gain.
U.S. West Texas Intermediate (WTI) crude futures rose 97 cents, or 1.2%, to $82.28 a barrel. The was up 3.5% on the week in an eighth consecutive weekly rise.
The notification stated that oil prices in the international market had risen around $85 a barrel which was the highest since October 2018.
The government authorities, however, said the government had absorbed the pressure of increasing international rates and provided “maximum relief” to consumers by keeping the petroleum levy and sales tax to a minimum, the Finance Division said.
“Therefore, prices worked out by Ogra (Oil & Gas Regulatory Authority) have been approved,” it added.
Earlier this month, government had raised the price of petrol by Rs4 per litre.
Speaking to local media, Minister of State for Information Farrukh Habib defended the price hike, saying it was still lower when compared to the international petroleum prices as he blamed global inflation caused by the Covid-19 pandemic.
“In the last 15 days, petroleum prices rose by 13.5pc globally but we have increased the rates by only 8pc,” the minister said in a media talk delivered in Faisalabad. “The difference was absorbed by the government. We chose to take a hit of billions on our revenue but ensured that the burden passed on the public of this hike was as low as possible,” Dawn quoted him as saying.
“Coal, through which electricity is generated and is used in a lot of our industries … it’s price has risen from $50 to $250. We import all of the edible oil. Its price has gone up from $500 to $1200 and $1300. This is extraordinary inflation that has taken place in the entire world.
“The circumstances have changed in the entire world due to coronavirus, which is why prices are going up all over the world.”