Raising oil prices: Prime Minister stops Ogra over intelligence warning

[Lahore_Real_Estate]

ISLAMABAD : Prime Minister Syed Yousuf Raza Gilani stopped Oil and Gas Regulatory Authority (Ogra) from raising oil prices after receiving a warning from intelligence agencies that people could take to street against a further hike in oil prices during December, Business Recorder has learnt.

Sources said that intelligence agencies as well as Petroleum Minster Syed Naveed Qamar had recommended to the Prime Minster not to raise the price of oil in line with global price as such a rise may well be the last straw on the camel's back with the populace struggling to make ends meet with a shrinking rupee value.

Ogra was ready to notify an increase in price of petrol by Rs 1.73 per liter, HOBC by Rs 2.17 per liter, High Speed Diesel (HSD) by Rs 2.14 per liter, Light Diesel Oil (LDO) by Rs 2 per liter and kerosene oil (SKO) by Rs 1.58 per liter on November 30, 2010 in line with global prices. "But the Prime Minister issued directions on November 30, 2010 not to raise oil prices which stunned Ogra," sources said, adding that in the existing mechanism, Ogra has been making automatic adjustment in oil prices every month in line with global oil prices.

The average monthly prices of petroleum products in international Arab Gulf market witnessed increase in the range of 3.6 to 4.6 percent during November 2010. Despite this increase in global oil prices, the Prime Minister directed Petroleum Levy (PL) on petroleum products to be slashed and margins of dealers and refineries were reduced to provide relief to consumers. The reduction in PL further impacted on the General Sales Tax (GST) on petroleum products and the combined impact of reduction in PL and GST on government revenue was estimated at around Rs 2 billion for December 2010.