ISLAMABAD - The PML-N government has escalated the burner under the national oil cauldron by approving up to Rs5.89 per litre raise in fuel prices for this month, adding to the miseries of inflation-hit masses.

This hefty price increase to be effective from September 1, under the monthly price review mechanism, would jack up the prices of almost all items on account of the increased cost of transportation and the shortage of CNG will amplify the impact.

Under the notified oil prices, the diesel price with a rise of Rs2.50/litre has now reached at Rs 112.26 while petrol with a raise of Rs4.64 will now be available at Rs109.14/litre. Kerosene oil price after a rise of Rs4.71/litre now stands at Rs105.99/litre, high octane blended component (HOBC) after a high raise of Rs5.89/litre will be at Rs138.33/litre, and Light Diesel Oil (LDO) with an increase of Rs2.31/litre will now be available at Rs98.43/ litre.

The retail price of petroleum is usually 30-40 paisa per litre more than the ex-depot price fixed by the government because of transportation cost from depots to the retail outlets. The higher oil prices are likely to take a toll on potential growth, due to higher input costs and the detrimental effect of increased price volatility on business investment.

With this gigantic POL prices hike, prices of food and agricultural commodities, metals and minerals would also witness a new height while higher energy prices have already contributed to rising food prices, because energy accounts for over one third of the costs of grain production.

The Oil and Gas Regulatory Authority (Ogra) in its summary, dubbed as a working paper, sent on Friday had proposed this raise, which was approved and notified by the ministry on Saturday. The regulatory authority also proposed the ministry to maintain POL prices at existing level by adjusting petroleum levy already imposed on oil prices.