Due to the continued tensions in the Red Sea, which have affected the supply of crude oil in Europe and the Middle East, prices for MS gasoline and High-Speed Diesel (HSD) are predicted to increase significantly the next week.
On January 31, 2024, Pakistan is anticipated to increase the price of gasoline and diesel by Rs. 7 per liter. After four months, if it were raised, this would be the first spike. The higher prediction is predicated on the $4–$5 increase in global prices for HSD, gasoline, and crude oil in just one week.
While US West Texas Intermediate crude prices rose 0.41 percent to settle at $75.4 per barrel, Brent crude crossed $80 per barrel, up 0.34 percent in the last 24 hours.
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In just one week, the price of HSD jumped from $93 to $97-98 per barrel, while the price of gasoline surged internationally to about $89 per barrel from $83 per barrel. Next week, there will probably be an increase in local market prices as a result of this surge. The Rupee/$ rate in the local market is notably consistent around 279, which has contained even larger volatility.
The caretaker federal government lowered the price of gasoline by 8 rupees per liter to Rs. 259.34 on January 15, 2024. The cost per liter of high-speed diesel remained constant at Rs. 276.21. The currency rate and global pricing have a significant impact on Pakistan’s petroleum prices.
However, the petroleum development levy plays a significant impact in the present prices. Currently, the government levies a fee of Rs. 60 on each liter of high-speed diesel and gasoline.
Due in part to shipping delays in the area as ships avoid the Red Sea, the physical markets for crude oil in the Middle East, Europe, and Africa, as well as the Brent crude futures market, have been indicating a tighter supply globally. This disruption has occurred at the same time as other factors, like growing Chinese desire for further competition in the purchase of petroleum, which, if tensions don’t subside, will probably harm Pakistan’s fuel supplies.
Nearly 80% of the world’s oil trading is priced using the Brent market structure, which hit a two-month high last Friday when tankers departed the Red Sea in response to airstrikes on Yemen by the United States and the United Kingdom. The Houthis of Yemen began assaulting Israel-bound ships in the Red Sea last year as a form of vengeance for Israel’s slaughter in Gaza.
The Houthis want the war to end and for Israel to open the Gaza Strip to humanitarian aid.
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