October 14, 2001	Sunday	Rajab 26, 1422

KARACHI, Oct 13: Refinery operators and oil analysts forecast a price cut in petroleum products on Monday owing to sagging global oil markets and weakening of the dollar.

Oil Companies Advisory Committee (OCAC) will meet on Monday to announce the new prices for the period of October 16-31 despite strike call given by a religious group against US bombing on Afghanistan.

A local refinery executive sees a price drop of at least one rupee per litre on almost the entire range of products.

If the government raises the petroleum development levy (PDL) at the last moment due to expected shortfall in the revenues, chances of price cut still loom large, the refinery official said. Currently, PDL accounts for Rs11.40 per litre on petrol, Rs2.15 per litre on kerosene and Rs2.06 per litre on diesel.

On August 31 price fixation, a 50 paisa per litre was increased on account of PDL.

An oil analyst at a brokerage house also predicted a possible decline in prices by at least one rupee to Rs2 per litre as the rupee had either in current fortnight gained strength against the dollar or remained steady. Likewise, oil prices in the current fortnight ranged between $19 to 22 a barrel. In the previous fortnight, oil prices had surged to $26 a barrel but later came down to $22 a barrel.

The average price of a dollar in the inter-bank market during September 15 to 29 was Rs64.10. In the current fortnight between October 1 to October 13, the average price of greenback is Rs62.27 which means that rupee has gained its value by Rs1.83 for a dollar or 2.8 per cent.

Besides, oil marketing companies (OMCs) like Pakistan State Oil (PSO) and Shell Pakistan will also announce new prices of furnace oil on Monday.

The OCAC had raised the petroleum prices on September 15 ranging from 2.15 to 7.24 per cent, attributing to rising oil prices after terrorist attacks on the United States on September 11. Again on October 1, diesel prices were raised by one rupee per litre due to levy of war risk insurance charges by the shipping companies which offset the declining prices of crude and finished product in the global markets.

The upcoming price revision of October 15 now holds a lot of interest among transporters, as one group had decided to go on strike on October 19 against the price hike in diesel by one rupee per litre on October 1, while the other group disagreed with it.

Karachi Transport Federation (KTF) and Supreme Council of All Pakistan Transporters had already called for an strike on October 19. However, President Karachi Transport Itehad (KTI), Irshad Bukhari does not favour any strike call in the current delicate situation in the country. He said he has only urged the government to disband the OCAC and take back the authority of revising POL prices as transporters are not satisfied.

On the other hand, oil marketing companies (OMCs) are worried over the falling consumption of POL products in the country which is quite evident from the decline of 24 per cent in quantity and 37 per cent in dollar value from import of petroleum products in July-September 2001 as compared to same period of 2000.

The industry consumption of POL products during July-September 2001 has declined by 13.5 per cent over the same period of last year due to less piling up of stocks and poor market conditions in the wake of September 11 incident on the US.

The industry consumption of POL products has been essentially stagnant depicting a negative growth of 0.5 per cent primarily due to economic slowdown.

Key products like jet petroleum (JP-1), MOGAS, SKO and LDO declined by 8.2 per cent, 5.7 per cent, 6.2 per cent, while HSD and fuel oil showed a marginal growth of 0.6 per cent.

Ex-refinery price of motor gasoline is Rs13.38 per litre but consumers get the end-product at Rs32.46 per litre after an addition of 51 per cent taxes. Similarly, in the ex-refinery price of diesel of Rs12.39 per litre, the share of fixed taxes is 25 per cent, raising the selling price to Rs19.19 per litre.