First half of Jan’24: Petroleum products’ prices may be sustained

ISLAMABAD: The interim government may sustain the prices of petroleum products in the first half of January 2024 following a marginal increase in the prices of Brent globally.

According to the estimates of Oil Marketing Companies (OMCs), the prices of petrol and kerosene oil (SKO) would go down by Re1 per litre, whereas the prices of high-speed diesel (HSD) and light diesel oil (LDO) may go up by Rs2 per litre.

The estimates of OMCs are based at zero adjustment in exchange rate and current petroleum levy (PL) rates and general sale tax (GST) rates. The government is charging Rs60 per litre PL on petrol and HSD and zero rates on GST.

Significant reduction in POL products likely

Brent oil prices internationally remained between $77.95 to $ 81.07 per barrel since December 16, 2023. In the last review, the government applied an exchange rate of Rs284.28 against the US dollar.

Trading companies that transport crude oil stopped sending some tankers through the Red Sea to avoid the threat of drone and missile attacks by the Houthi rebels in Yemen. Rerouting the oil vessels would add delays and extra costs to journeys, putting upward pressure on oil prices, the experts said.

The data from the Pakistan Bureau of Statistics (PBS) shows refined product imports dropped by 29 percent to $499 million in November 2023 compared to $708 million the previous year. Meanwhile, crude oil imports increased by four percent to $566 million from $546 million in the same month last year.

Due to higher petroleum prices, Pakistan witnessed a significant 16 percent decline in the sale of petroleum products in the initial five months (July-November) fiscal year 2023 compared to the same period last year, as reported by the Oil Companies Advisory Council (OCAC).

Copyright Business Recorder, 2023