Prices of petroleum products in Pakistan are expected to have sharp rise keeping in view trends in the global market, say market analysts.
The experts expressed the fear that petrol may be dearer by Rs7 per litre and high speed diesel (HSD) by Rs10 per litre from October 16.
Industrial experts say that the prices are worked out 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 as per the analysts.
Usually, the POL prices are worked out based on 13 days’ data, and in the next three days, the bullish trend in oil prices is likely to 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, experts added.
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, experts said, explaining that so far, Light Arabian (LA) crude oil has reached $79.5 per barrel on average.
As far Pakistan is concerned, 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.
They said the HSD premium is reasonable at 2.2 percent 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 percent 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.
