WIDESPREAD PROTESTS LODGED AGAINST RISE IN POL PRICES
SHABBIR H. KAZMI
Feb 6 - 12, 2012
General public, opposition parties and even coalition partners are widely condemning the recent hike in POL prices. The government came under fire in Senate and members belonging to various political parties also staged a token walkout demanding an immediate withdrawal of the current raise in prices of petroleum products.
Deputy Speaker National Assembly Faisal Karim Kundi blocked the combined effort of the opposition and the coalition partners to table a resolution seeking reversal of the decision of increasing petroleum products' prices and gas tariff.
Kundi abruptly adjourned the session on Thursday last when PML-N member Ahsan Iqbal sought permission to move a joint resolution.
The resolution proposed by PML-N was signed by MNAs belonging to different political parties both from the treasury and opposition benches including Ahsan Iqbal, Mahtab Abbasi, Shahid Khaqan Abbasi, Saad Rafiq, Rana Tanveer of PML-N, Aftab Aahmed Khan Sherpao from PPP-Sherpao, Mufti Kafait from JUI-F, Wasim Akhtar from MQM, Talib Hassan Nakai from PML-Q, Bushra Gohar from ANP, Nawab Yusuf Talpur and Zafar Ali Shah from PPP and others.
The resolution stated, "This house is of the view that the increase in the prices of petroleum products made by the government should be withdrawn immediately, as it will have serious impact on common persons by increasing inflation in the country".
As usual, the concerned minister came up with lame excuse explaining reasons behind rise. The minister termed this unfortunate but insisted that the situation was beyond the control of the government as Pakistan is heavily dependent on imported oil.
He informed the house that daily indigenous oil production was 70,000 barrels against demand of 380,000 barrels. Therefore, domestic prices have to be adjusted according to the movement of crude oil prices in the international market.
The house was informed that Oil and Gas Regulatory Authority (Ogra) adjusts prices on the basis of change in the international prices and rupee dollar parity. However, members termed the hike result of the government's mismanagement. They insisted that international crude prices are not going up the way oil prices are increasing in the country.
Ahsan Iqbal was of the view that the entire nation is in a state of shock because of massive rise in the prices of diesel and petrol. He pointed out that during the tenure of the incumbent government, Ogra issued 1000 notifications and most of them were related to increase in POL prices.
Talib Nakai, who is also chairman of National Assembly Standing Committee on Petroleum and Natural Resources, strongly condemned the increase in POL prices on behalf of the party and the panel as well. He has been unanimously mandated by the standing committee to raise the matter in the House and press the government to reverse the decision.
According to the representatives of farmers community, increase in prices of POL products, particularly high-speed diesel (HSD) will put additional burden of Rs20 billion on the farmers. Reportedly, farm sector uses four billion liters diesel every year and the recent increase in the petroleum prices would add up to four per cent to their expenses.
The hike in transportation cost would eventually push up the production cost of food items like wheat, rice, sugar, sugarcane, pulses and livestock. The prices of inputs like fertilizers have already increased and forced growers to reduce consumption. The price per bag of urea has almost doubled in last one year to Rs1900 from Rs850. Similarly, DAP price per bag has gone up to Rs4,200, rendering it almost unaffordable for most of the wheat growers.
After significant increase in all kinds of petroleum products, the LPG dealers increased the price of liquefied petroleum gas (LPG) by Rs14 per kilogram. This has been attributed to increase in international markets and LPG dealers decided to increase price by Rs165 and Rs660 on domestic and commercial cylinders respectively.
The decision became effective from 3rd February as marketing companies formally recommended the recent increase in LPG prices.
To add to the woes of commuters, ministry of petroleum & natural resources has imposed 10 per cent surcharge on compressed natural gas (CNG) prices, effective from 1st February.
It seems that the government is planning to bring CNG prices at par with the petrol. The ministry would issue a notification in this regard and the summary has been sent to the economic co-ordination committee (ECC) of the cabinet for equalizing the price of CNG and petrol. The purpose of this decision is to discourage the usage of CNG.
The geopolitical conditions are raising supply concerns and affecting crude oil prices. Iran has postponed plans to immediately cut the flow of crude oil to Europe in retaliation for EU sanctions over its nuclear program.
Earlier, Iran threatened to close the Strait of Hormuz, a vital oil passage, and the head of its national oil company warned that EU sanctions could push oil prices up to between $120 and $150 a barrel. On top of every thing, a lot depends on the outcome of meeting between Iran and an International Atomic Energy Agency team that recently visited Tehran.
The geopolitical tension in Iran and concerns over Greece's debt default are driving oil in different directions but helped oil prices to remain stable to a large extent.
The situation demands two pronged strategy 1) containing dependence on fossil oil and 2) avoiding efforts to enhance revenue collection by imposing new taxes on energy products.
Rising oil import bill is eroding country's foreign exchange reserves and persistent hike in the tariffs of electricity and gas is fueling inflation. It is feared if supply of energy products is not improved and prices not contained Pakistani exporters will not remain competitive in the global markets.