Oil prices kept unchanged

Prime Minister Syed Yusuf Raza Gilani on Saturday turned down an Oil and Gas Regulatory Authority (Ogra) proposal, directing the government to keep the petroleum products' prices unchanged for the current fortnight to avoid further burden on the consumers.
By keeping the prices unchanged, the government has to absorb the difference of the last 15 days and pay subsidy of billions in addition to Rs 80 billion already picked-up to protect the consumers.
Ogra on Friday sent a summary to the Ministry of Petroleum (MoP) for the increase in all petroleum products prices, including kerosene oil. It proposed upward revision in diesel prices by Rs 9, petrol Rs 6 and kerosene Rs 10 per liter for next 15 days. Ogra recommendations were forwarded to the prime minister for a final decision.
It works out difference in petroleum product prices for a particular fortnight and sends its recommendations to the government for a final decision. Ogra had suggested the increase for the current fortnight, but the government, which has to take its implications into consideration before any upward revision rejected the proposal. It added around Rs 10 in diesel and petrol prices for the last fortnight.
The recommendations of Ogra again met the same fate for the current fortnight. The government agrees with Ogra that capping of the petroleum product prices was building up pressure on the economy, but it can not ignore the difficulties borne by the common man due to spiral effect of upward revision in the oil prices.
The government had revised the petroleum products prices twice this year - first in March and then in April - for minimising negative impact of subsidy on the economy, but its spiral effect pushed up the prices of edibles and other household items to make the low income group's lives hard.
After taking this factor into account, the government again went back to the previous strategy of capping the oil prices to pick up billions of rupee as subsidy on May 15.
Instead of getting support by cutting down subsidy on the oil prices, the government is opting for external resources for plugging in the budgetary deficit. It has contacted many countries, which it believes can help Pakistan in coming out of the financial crisis.
One of them is seeking the facility of deferred payments for oil import from Saudi Arabia. China and Saudi Arabia have already extended financial support for strengthening Pakistan's economy.