KARACHI, Jan 4: Petrol has become costlier by Rs7 per litre and high speed diesel (HSD) by Rs5 in just one year. In January 2004, petrol was selling at Rs33.78 as compared to Rs40.39 in January 2004. In January 2003, it was being sold at Rs32.50 per litre.

Similarly, on January 1, 2004 and January 1, 2003 diesel was available at Rs22.78 and Rs21.14 respectively as against Rs26.21 per litre on January 1, 2005. High Octane Blending Component (HOBC) was on January 1, 2004 and January 1, 2003 being sold at Rs 37.67 and Rs 36.41 as compared to Rs44.59 per litre on January 1, 2005.

Kerosene prices on January 1, 2004 and January 1, 2003 were Rs22.38 and Rs20.70 per litre. Currently it is priced at Rs26.04 per litre. Light diesel oil (LDO) was selling at Rs18.63 on January 1, 2004 as against current price of Rs22.92 per litre. In January 1, 2003 it was available at Rs17.60 per litre.

International crude oil price, which was $29.90 a barrel on January 1, 2004, is now at $31.29 a barrel. On January 1, 2003, it was $29.90 a barrel. The rising trend in oil prices has not only flared cost of production of many industries but it has played havoc with transport fares in the past two years.

According to president Karachi Transport Itehad (KTI), Syed Irshad Hussain Shah Bokhari - transport fares of bus, mini bus and coaches on February 27, 2003 were Rs5-7.50, Rs6-8 and Rs10-11 respectively. On April 21, 2003 - the fares were dropped to Rs4-6.50 for buses, Rs5-7 for mini buses and Rs9-10 for coaches due to drop in diesel prices.

On January 23, 2004, transport fares were again brought to February 27, 2003 levels and since then it had been intact despite two recent increase in diesel prices by the oil marketing companies (OMCs) in the end of December, he said adding that diesel became costlier by Rs1.59 per litre on December 15, 2004 followed by 25 paisa on December 31, 2004.

He said that the KTI had given strike call on January 5 in case December 15, 2004 price hike had not been withdrawn but the OMCs further increased the prices on December 31, 2004.

He said that the protest and strike is imminent against the federal government and the OCAC, otherwise the federal government would continue to give secondary importance to transporters' problems.

Despite assurance from provincial government officials, KTI had decided to observe strike on January 8. In case the government did not take back the diesel prices on January 15, transporters would announce indefinite strike.

"The OCAC has virtually no role to play. It takes dictation from the federal government," Bukhari said. Chairman Site Association of Industry, Mohammad Nisar Sheikhani said that any increase in diesel and petrol prices would result in raising cost of shipping and transportation of goods and raw materials either arriving from upcountry or through inter-city movement.

Actually the input cost goes up with increase in POL prices, thus fuelling an inflationary trend in commodity prices. He said that the government had not increased the prices when crude oil prices had reached over $50 a barrel. Now the government has been increasing the prices of POL products when international oil prices are on the decline.

Research Head of Invest Capital and Securities, Mohammad Sohail said it seems that the government will continue to passing out the impact on consumers of downward and upward movement of global oil prices.

He said the government has incurred a huge loss of Rs40 billion in petroleum development levy (PDL) revenue. He said that country's inflation rate was pretty much safeguarded from global oil prices as the government had capped local petrol and diesel prices. With the recent two increases, the inflation rate in January 2005 is expected to see the effect of this rise.

Breaking down the consumer price index (CPI) basket weight ages, petrol and diesel hold a combined weight of close to two per cent. However, the impact of price hike in POL products is more pronounced in its indirect nature.

Fuel and lighting and transport and communication with weights of seven per cent each in the CPI basket are impacted. Food prices are also affected to an extent due to rise in diesel prices, he said adding the increase in POL products also makes a direct impact on the prices of vegetables which reach the city from the upcountry and nearby growing areas.

Since the new Subzi Mandi has been shifted 22 kms away from the main city to Super Highway, transporters already charge high fares for its transportation at the main city markets.

According to president Falahi Anjuman Wholesale Vegetable Market, New Subzi Mandi, Haji Shahjehan, transporters (carrying vegetables in Suzuki pick up) have increased the fares to Rs500-600 from Rs300-400 for transporting greens to the city, while Mazda truck owners are charging Rs10,000 as compared to Rs8,000-9,000 for carrying vegetables.

Similarly, a truck, arriving from Punjab with a load 10 tons (250 maunds of vegetables) now costs Rs15,000-16,000 in transport fares as compared to Rs12,000 prior to price hike in POL products.

The transportation charges for bringing 20 tons of vegetables (500 maunds) in a heavy truck from Punjab now costs Rs28,000-30,000 as compared to Rs20,000-22,000, he said. The increase in transport fares usually adds Rs1 to 2 per kg in the prevailing vegetable prices, Shahjehan said.