KARACHI, March 17: The President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Riaz Tata, has urged the government to decrease its taxes and surcharges on imported petroleum products in order to offset the increasing trend in domestic oil prices.

The continuous rise in oil prices will have a devastating impact on the trade and industry also, he said in a statement.

He referred to the specific agreements made by Pakistan on oil supply from Muslim countries at price-freeze basis and remarked that under such facility the fuel prices in the country should be stable.

The sixth consecutive price revision in the current calendar year has taken the oil prices to their historic high levels. The previous highest price levels of POL products was in November which were later lowered after the new government took office, says oil analyst, Murad Ansari, at Khadim Ali Shah Bukhari and Company.

He says while the government has been very proactive in protecting its political interest by capping POL prices at times of referendum and elections — this is the time when the government should be curbing its taxes on POL products to protect the interest of consumers.

Oil Marketing Companies (OMCs), particularly PSO and Shell, continue to benefit from the persistent rise in POL prices in the form of inventory gains. The pre-tax inventory gains for PSO and Shell are estimated at Rs240 and Rs118 million respectively, the analyst says.

Oil analyst at IP Research, Humaira Zaheer says POL prices during January 1 to March 15 have gone up by 13-21 per cent. Diesel price in the last two-and-half months rose by 21 per cent followed by Mogas and HOBC by 15 and 13 per cent respectively. Light diesel oil (LDO) and kerosene price went up by 19 per cent each during the above mentioned period.

The price of kerosene oil, diesel and LDO have posted a rise of 64, 66 and 51 per cent respectively if compared with prices prevailing on March 15, 2002, she says attributing the current upward price trend to rising oil prices in global markets in the wake of any massive US attack against Iraq (that is more probable during the current week).