Fuel prices set to rise as Middle East crisis boosts oil

KARACHI: Pakistan is likely to see a sharp increase in the prices of petrol and high speed diesel (HSD) in the next fortnightly review of petroleum prices, due to a surge in their international prices amid escalating tensions in the Middle East, industry officials said on Wednesday.

The government, which adjusts the prices of petroleum products every 15 days based on the recommendations of the Oil and Gas Regulatory Authority, is likely to raise the price of petrol and diesel by Rs7 per litre each on January 31, 2024, an official told The News.

The expected hike in the prices of petroleum products would come after domestic prices remained stable or witnessed a decrease since November 01, 2023.

“The situation is most likely to be different this time after petroleum prices saw some reduction in the last three months,” an oil sector official said as he pointed out that global prices of petroleum products went up in the last one week after a crisis in the Middle East, especially the Houthi attacks on ships in the Red Sea, triggering the strike from US and UK against them in Yemen.

They said that the expected jump in the domestic prices is based on the global prices of HSD, petrol and crude oil, which have fluctuated upward by four to five dollars in the last one week.

The international price of petrol jumped to $89 per barrel from $ 83 per barrel in one week whereas the price of HSD surged to $97-98 per barrel from $ 93 per barrel in a week.

The international price of crude oil increased to $80 per barrel from $76 per barrel.

Officials said that the four to five dollar per barrel increase in the global prices has been translated to push the prices up in the market.

They said that the dollar in the local market is stable, otherwise the price fluctuation would have been even higher upwardly in the local market.

They added that some resistance came in the prices of these products at the international level and it is expected that in the next few days, the prices may remain at these levels.

The expected surge in the domestic prices of HSD and petrol would come after November 01, 2023 when petrol was priced at Rs238.38 per litre and fell to Rs259.34 per litre in the successive review of petroleum prices.

Similarly, the price of HSD also fell in the last few reviews of its price as it is currently available at Rs276.21 per litre from Rs303.18 per litre on 1st November 2023.