ISLAMABAD: The government ruled out on Tuesday reversal of recent increase in the prices of petroleum products, saying that it was indexed and linked to the international prices and there was no way the equation could be changed.

Winding up discussion on adjournment motions on the increase in the prices of petroleum products and gas in the Senate, Minister for Water and Power Syed Naveed Qamar pointed out that removal of taxation would add around Rs200 billion to the budget deficit and printing of more currency notes would spark hyper inflation.

He said the price of crude oil in the international market was $65 per barrel a couple of years ago, but now it had been fluctuating around $110. The US dollar had gone up to Rs90 from Rs65 four years ago.

He said the Oil and Gas Regulatory Authority calculated the prices on the basis of average of the past 30 months with appropriate taxation. He said a tax of Rs30 per litre on petrol and Rs20 per litre on diesel had been levied.

He said the country was facing a gas shortage because of mistakes made by the previous governments. An expensive resource had been blatantly misused, instead of utilising it objectively.

The minister said the gas was provided on a priority basis to the industry and power sector the world over. He warned that the proliferation of gas usage might lead to a dangerously disturbing situation in future.

Mr Qamar said about 200,000 applications for gas connections were pending and the number might reach two million in the next five years. “With the existing resources, it will not be possible to meet the needs of domestic consumers.”

Stressing the need for rethinking, the minister noted that the levy of surcharge had become inevitable because the low price was forcing people to use CNG. The price of CNG was still 55 per cent of petrol price, he added.

He said in case of depletion of indigenous gas resources, imported gas would not be affordable for the industry, power generating units or the domestic consumers, be it Iran-Pakistan gas pipeline, Turkmenistan-Afghanistan-Pakistan-India gas-pipeline or the liquefied natural gas. “It’s time we start thinking about optimal use of gas.”

Mr Qamar said the usage of CNG for transport could not be afforded now and a hike in gas tariff was essential to strike a balance between supply and demand.

Earlier, Senators castigated the government for revising the prices of petroleum products for more than 20 times during three and a half years of its rule. They called for evolving a strategy to tackle the energy crisis and overcoming electricity and gas loadshedding.

They criticised the government for its failure to devise a policy to provide relief to the common man.