Oil likely to 'boil' during next fortnight

Oil is going to boil again for the consumers as the caretaker government is preparing to increase the rates for the fortnight commencing from March 16, it is learnt.
Sources said that this time the increase would be even bigger than last fortnight as the oil prices have been continuously on the rise in the international market for the last couple of weeks, adding more to subsidy in the past weeks.
An official, working on impact of the rising international prices on the domestic market, told Business Recorder on Friday that with the unprecedented jump in the global rates of oil in the past week, the subsidy amount for a fortnight had gone up to Rs 16 billion, whereas last fortnight's increase had brought only Rs 3.5 billion relief.
He said that the situation demanded a quantum increase in local oil products prices to reduce the amount of subsidy to ease pressure on the budget. The government is paying Rs 16 subsidy on one litre diesel and kerosene and it can not be 100 percent adjusted in subsidy for the remaining months of the current fiscal year. The government will have to pass on at least some portion of the recent increase to the consumers to avoid further hit on the budget, he added.
Setting an unhealthy practice wherein politics took over the economy, the Shaukat Aziz government had capped the oil prices in May last year. That government took its credit at every forum till its last day in office, saying that it took a bold decision to protect the consumers from additional financial burden.
It kept the decision unchanged despite severe criticism from certain quarters. Not only this, the caretakers, too, followed the same pattern of remaining 'popular' by keeping the oil prices unchanged for three months in office. This policy of enjoying 'popularity' among the masses latterly put the economy under pressure. The subsidy on oil is one among many factors to add substantially to the budgetary deficit for the current fiscal year to which the economic managers of the caretaker government have no solution.