April 16, 2002	Tuesday	Safar 2, 1423

KARACHI, April 15: The Oil Companies Advisory Committee (OCAC), for the second time, has kept the prices of petrol, diesel, HOBC, light diesel and kerosene “unchanged”.

However, the committee has increased the prices of JP-4 and JP-1 by 4.55 and 5.80 per cent. The new price of JP-4 is Rs16.33 as compared to Rs 15.62 per litre, while JP-1 will be available at Rs12.57 from April 16 as against Rs11.88 per litre, says a press release of the OCAC.

The OCAC statement said the prices have been calculated and there is no change in the prices of products except for JP-4 and JP- 1.

Like past practice, the OCAC press release was again silent as to why prices had been kept unchanged on key oil products despite their mounting prices in the global markets in the wake of Middle East tension followed by the margin increase of oil marketing companies. The Petroleum Ministry also did not give any details for maintaining the oil prices twice.

“It seems that the government has again downwardly adjusted the petroleum development levy (PDL) and other taxes in order to keep the prices constant,” Head of Research, Investment Capital and Securities, Mohammad Sohail said.

The fixed PDL was also adjusted downward in the last price review to absorb the effect of higher ex-refinery prices while keeping the final sales price unchanged and OMCs margins had also been kept constant.

As again no official breakup of the new oil prices has been announced on Monday, it seems that the full one per cent increase in oil companies’ commission is not yet incorporated.

On the other hand, consumers now feel quite relaxed of not paying high prices to buy oil products since the last one month, but market analysts are skeptical. They feel freeze on prices of petroleum products could be a tactical and a political move of the government. They fear that if this the case the petroleum prices could rise sharply to absorb the cumulative impact of increasing oil prices and full impact of OMCs’ margin revision by the government immediately after the referendum.

Besides oil products, it is feared that consumers may have to to swallow the bitter pill of hike in prices of drug and ghee and cooking oil on which the levy of GST has been deferred for short-term period.

Many oil analysts term the capping of oil prices as a political move of the government to ensure the desired results from the referendum process which is due on April 30.

Analysts say that the government should now come out with a clear statement as to why the prices have been kept unchanged twice and what is going to happen after referendum process is over. Will consumers face a severe jerk in shape of phenomenal price spiral in oil products after referendum?

The government, which is reported to have cut PDL and other taxes for the second time, must have suffered revenue losses in million of rupees in the last two price revisions. How it will cover after referendum.

Diesel prices will be watched with added interest on April 30 fortnightly price review as its rates were not increased for the third consecutive time. It should have been increased on March 15 review by about 3.2 per cent followed by another three to five per cent each on March 31 and April 15 reviews in view of rising international prices.