It was recently reported that prices of petroleum products in Pakistan are likely to go up in the coming months. The World Bank predicts the price of crude oil for the next couple of years. It is to increase from $55 to $60 per barrel during the current and next fiscal year.
Currently, the oil prices are hovering between $49 and $52 per barrel in the international market. Prices of petroleum products in Pakistan will increase by PKR 5 to PKR 10 per liter till 2018.
Nevertheless, the government of Pakistan may decide to absorb the price hike by making some adjustments in tax rates. The coming months are very important in terms of economic and political scenario in the country. Moreover, the increase in the prices of petroleum products are likely to affect the prices of various commodities and the financial nightmare of circular debt.
The hike in petroleum prices will also affect the import bill of the country. The import volume of oil products will continue to increase, because of high demand and consumption. This will not help the already unstable economy of the country.
The World Bank, in its April Commodity Markets Outlook, made it clear that increasing oil prices, supported by production cutbacks by Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members, will enable the market to re-balance overtime.
Recent Hike In Prices Of Petroleum Products
Back in December 2016, the government had announced its decision to increase the prices of petrol and high speed diesel by PKR 2 and PKR 2.70 per liter respectively.
From January to March 2017, the government has increased the prices of petrol and high speed diesel on four different occasions. This occurred cumulatively by PKR 6.7 per liter and PKR 6.8 per liter, respectively.
In any case, we’ll continue to track the upcoming trends of petroleum prices in Pakistan to keep our readers updated. The prices fluctuate as it is revised monthly. A substantial increase in the prices of kerosene is expected to minimize the price differential with petrol.