- Petrol, diesel prices may go up by Rs7-10 per litre.
- The perpetual devaluation of the Pakistani rupee against the US dollar is causing a surge in POL products in the country.
- The prices of POL products are fixed by the government fortnightly on the basis of recommendations by Ogra.
ISLAMABAD: Petrol may become more expensive again by Rs7 per litre and high speed diesel (HSD) by Rs10 per litre from October 16.
“We have worked out this huge increase in the price of both products keeping the first 10 days in view. The data shows that the prices of refined products have gone up from $79 to $91 per barrel from October 1,” sources in the industrial sector told The News.
Usually, the POL prices are worked out based on 13 days worth of data, and in the next three days, the bullish trend in oil prices will continue.
It all, however, depends on how much subsidy the government picks this time to pass a reasonable increase in petrol and diesel prices against the expected huge hike.
Since the government wants to make the IMF programme operational and is in talks with the IMF, it may not be able to reduce the increased POL prices this time, the sources told the publication.
So far, the government, in the last two fortnights, has approved an increase in the price of petrol of Rs9 per litre and high speed diesel of Rs7.01 per litre from September 16.
It increased the MS price by Rs5 per litre to Rs123.30 per litre and HSD by Rs5.01 per litre to Rs 120.04. From October 1, the government also approved a hike in petrol prices by Rs4 per litre to Rs127.30 per litre and in HSD by Rs2 to Rs122.05 per litre.
This would be the third consecutive hike in POL prices if the government further increases the POL prices from October 16 as has been worked out.
The prices of POL products are fixed by the government fortnightly on the basis of recommendations by the Oil and Gas Regulatory Authority (Ogra). The perpetual devaluation of the Pakistani rupee against the US dollar is also causing the surge in POL products in the country.
There seems to be no respite in oil prices in the global market either, the sources said, explaining that so far, light arabian (LA) crude oil has reached $79.5 per barrel on average.
In Pakistan’s case, however, three factors are causing the major surge in oil prices in the country, including a high FOB (free on board) of $85 + a $6.8 premium and the Rs171 per dollar exchange rate, added the sources. They said the HSD premium is reasonable at 2.2% but has an unprecedented FOB price and the latest MS price now is at $88 FOB.
According to the West Texas Intermediate, crude futures topped $80 last Friday for the first time since 2014. Oil went up more than 60% for 2021 as demand rebounds, while supply remains tight. Industrial experts said that unless the OPEC acts to meaningfully increase the supplies, the prices will still stay high.