The global oil prices continued the downward trend this week as supply finally appears to be coping up with the increased demand. This, however, is unlikely to result in any relief for Pakistanis as the Oil and Gas Regulatory Authority said that there won’t be any change in the petrol prices on December 1, 2021.
The prices of WTI Crude Oil in the global market was $80.76 per barrel while the price of Brent Crude oil was $82.43 per barrel last Wednesday. Since then, the prices have continuously decreased.
On Monday, the price of WTI Crude Oil fell to $76.10 per barrel, while that of Brent Crude oil decreased to $78.89 per barrel.
Economic experts say that the production of crude oil is finally gaining pace and appears to be matching the threshold of demand which peaked after the lockdown restrictions were eased all over the world. This has caused the prices to drop.
Experts are predicting that this trend will continue and there is a possibility of prices falling below $70 mark.
In October, the price of crude oil rose to historic high of $85 per barrel which bloated the import bill for countries like Pakistan who rely on imported oil. This, coupled with the appreciation in the value of the US Dollar, created record inflation as the government increased petrol prices and raised the electricity tariff to plug the current account deficit.
Will Pakistan lower the petrol prices?
Social media users are already sharing posts which say that the government is not decreasing the oil prices despite massive reduction in global oil prices. However, the pricing mechanism is not that straightforward.
An Oil and Gas Regulatory Authority (OGRA) official, while talking to SAMAA Digital, said that people should not expect any immediate relief in petrol prices.
He said that the value of US Dollar is still on the higher side while it takes at least 15 days to pass on the relief of reduced oil prices. He said that the prices will remain the same on December 1.
Energy expert Tahir Alam said that after the covid-lockdown were eased around the global, the international oil supply chain was disturbed due to the unavailability of labour and the rising shipping costs. Its impact was seen in the form of increased oil prices. Now those constraints are easing up and the price is expected to come down to $65 to $70 per barrel.
Alam also said that if this fall in prices coincides with the decrease in US Dollar’s value, then the public can expect some relief in petrol prices.