News

Traders regret no cut in oil prices despite fall in int’l rates

February 1, 2020 07:19 PM


The Pakistan Industrial and Traders Associations Front (PIAF) has expressed its serious concern for not passing on full relief to the public of oil prices’ cut in global market, as the government has rejected the OGRA’s recommendation of reducing prices of petrol and kerosene by Rs0.06 and Rs0.66 respectively for Feb, despite the fact that Pakistan has been receiving monthly oil supplies worth $275 million from Saudi Arabia on deferred payment since July 2019. Under this arrangement, Pakistan will get oil of $9.9 billion over three years.

PIAF Chairman Mian Nauman Kabir, in a joint statement along with senior vice chairman Nasir Hameed and vice chairman Javed Iqbal, said that the global oil prices have posted their largest monthly loss since May 2019, as fears of the Coronavirus continue to rise. The 15 percent price decline is also the worst January performance since 1991, according to Bloomberg.

He said that international oil prices during last month of January fell to a three-month low, and US benchmark crude is on track to suffer a loss of more than 12% in January as coronavirus intensifies the impact of seasonal weakness in the market, raising prospects for lower fuel prices. He said that the oil industry experts are predicting that the US benchmark West Texas Intermediate oil may drop under $50, which would bring prices to their lowest level since January 2019.

But contrary to the global oil market prices the OGRA’s calculations are wrong, recommending nominal cut in petrol rates for Feb, which was rejected by the government too, keeping the rates unchanged for petrol. It is to be noted that the authorities have decided to keep the price of petrol unchanged at Rs116.60 per litre for the month of February.

PIAF chairman lamented that the government had also kept petroleum product prices unchanged for October 2019, though Ogra had recommended a reduction of up to 2.6%. The government at that time tried to justify the decision of not passing price relief on to consumers owing to increasing trend in the international market, predicting that the prices may remain on the higher side in future.

Nasir Hameed criticized the government for not announcing cut in oil prices for the month of Feb, asking the authorities to announce a visible reduction to make it in line with the international prices.

Javed Iqbal said that unwise approach of the government has caused exorbitant hike in production cost putting highly negative impact on the growth of industrial activities and exports. He said apart from heavy GST, people were paying record high petroleum levy, which was totally unjustified.

He said Pakistan’s heavy reliance on furnace oil for power generation has made power tariffs in Pakistan for industry and consumers one of the highest in the region and it was right time that government should make decent reduction in petroleum prices that will bring down manufacturing cost, facilitate better growth of business activities and ease lot of pressure on the common man.

He said government has imposed heavy taxes on POL products due to which cost of doing business in the country has gone up manifold and people were also facing many problems.

 



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