Petroleum prices to remain stable amid steady crude and rupee rates

KARACHI: Petroleum prices are expected to remain stable in the next fortnightly review, as global crude prices and rupee exchange rates showed little variation, oil industry sources said on Friday.

The government will review the domestic prices of petroleum products on December 31, 2023, based on the international market prices and the rupee-dollar parity.

According to the oil industry's calculations, the ex-depot price of petrol, the most widely used fuel in the country, is likely to decrease by 0.98 rupees per liter to Rs266.36 from the existing price of Rs267.34. Meanwhile, the price of high speed diesel (HSD), primarily used for transport and agriculture, is projected to increase by Rs1.28 per liter to Rs277.49 from Rs 276.21 per liter.

The ex-depot price of kerosene, used for cooking and lighting in remote areas, is expected to fall by Rs1.22 per liter to Rs189.80 from the existing price of Rs191.02 per liter. Additionally, the price of light diesel oil (LDO), used for industrial purposes, is forecast to rise by Rs1.77 per liter to Rs166.41 from Rs164.64 per liter currently.

The ex-depot prices of petroleum products have shown almost no change after the reduction of petroleum product prices in the last two reviews.

Oil sector experts indicated that global crude prices didn't experience significant fluctuations during the last fortnight, and the dollar rate remains essentially unchanged from the previous fortnight with a slight reduction. This suggests that prices for end consumers are unlikely to decrease in the next fortnight.

Pakistan relies heavily on imported petroleum products, with more than 70 percent of its demand met through imports.

The country witnessed a 5.76 percent year-on-year increase in the petroleum group import bill for November 2023. The bill amounted to $1.32 billion, up from $1.25 billion in the same period last year, indicating a steady rise in the country's oil expenditure.

Petroleum products accounted for 29.76 percent of the total import bill in November 2023.

The increase in petroleum product prices during the first quarter of this fiscal year led to a significant drop in consumption. However, the second quarter witnessed stabilization or even decreases in petroleum product prices, which pushed up consumption in November this year.