ISLAMABAD: Convener FPCCI Central Standing Committee on Insurance Dr. Murtaza Mughal has urged the government to benefit from oil price collapse in the international market.
The government should provide relief to masses by reduction in prices of oil and electricity etc. and build strategic oil reserves as oil in the international market has become cheaper than the bottled water, he said.
The burden of the surge in oil price in the international market is immediately transferred to masses by the government but the process of reduction in the prices is always very slow, he noted.
In a statement issued here on Saturday, he said the coronavirus has dropped the demand for oil while the ongoing price
war between Russia and Saudi Arabia has further reduced prices which should be considered an opportunity by our government. Building oil reserves will improve energy security, therefore, it should not be delayed as the tussle between major oil producers may not last for a long time, he said.
Dr. Mughal noted the price war is bankrupting majority of the oil producers and they are eager to find a solution to the stalemate while Saudi Arabia is using the opportunity to keep its dominance in the global oil market. He said the Saudi decision can also dismember OPEC as a majority of the members of the group want to increase the price which is not possible at present due to aggressive approach of the Kingdom. He said that Saudi Arabia is spending $8.98 to produce one barrel of oil which is cheapest in the world while the cost of US shale oil production stands at $23.35, non-shale oil cost stands at $20.99 while Russian production cost stands at $19.21 per barrel.