Fuel price mechanism

The price of fuel in Pakistan has been linked with international market and prices are determined accordingly. The OGRA is the authority to pass this increase to customers. The following is the impact of fuel price variance. First, it is beneficial to government because tax rate is variable and every increase in cost also increase tax amount as well. The oil companies are also making more money without any justification because commission rate is variable. The ultimate consumer which is general public is unfortunate who has to bear all increases. At the same time the economy is badly affected due to increase in inflation. Nonetheless, the government is responsible and getting the flak for the above mentioned reasons. It is suggested that our lawmakers in assembly and Senate should consider revision of fuel price formulae by fixing the Government tax/Fuel companies commission on quantity basis and not rates on cost (being practiced now) which will minimize the impact of increase and its adverse impact on economy. Furthermore, it will be a source of relief for the general public, which is badly affected. AHMED SOOMAR, Karachi, November 10.

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