Petroleum Price Stability Expected in First Half of January 2024 Amid Global Factors

The interim government is poised to maintain the stability of petroleum product prices in the first half of January 2024, responding to a slight uptick in global Brent prices.

According to projections by Oil Marketing Companies (OMCs), petrol and kerosene oil (SKO) prices are expected to decrease by Re1 per litre, while high-speed diesel (HSD) and light diesel oil (LDO) may see an increase of Rs2 per litre.

OMCs’ estimates are contingent on an unchanged exchange rate, as well as prevailing petroleum levy (PL) rates and general sales tax (GST) rates. The government presently imposes a PL of Rs60 per litre on petrol and HSD, with zero GST rates.

Internationally, Brent oil prices have fluctuated between $77.95 and $81.07 per barrel since December 16, 2023. In the latest assessment, the government applied an exchange rate of Rs284.28 against the US dollar.

Notably, trading companies navigating crude oil routes have altered paths to avoid the risk of drone and missile attacks by Houthi rebels in Yemen, potentially causing delays and increased costs, consequently influencing upward pressure on oil prices.

Data from the Pakistan Bureau of Statistics (PBS) indicates a 29 percent drop in refined product imports to $499 million in November 2023 compared to $708 million the previous year. Conversely, crude oil imports experienced a four percent increase to $566 million from $546 million in the corresponding month of the previous year.

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