KARACHI, Nov 14: Oil marketing companies executives and refinery operators have ruled out any rise in the petroleum products prices in its fortnightly review due on Thursday but are unsure whether the Oil Companies Advisory Committee (OCAC) is going to announce a cut of one or two per cent or keep it unchanged.

Some executives in OMCs and officials in refineries said that “prices may be cut by one to two per cent following stability in global prices of finished products coupled with gaining strength of the rupee against the dollar in the current fortnight as compared to previous one.”

But a senior executive in a refinery and an oil analyst at a brokerage house indicated that the OCAC may even prefer to keep the petroleum prices unchanged.

They, however, ruled out any price increase in oil products following one to two dollar per barrel surge in crude price three days back coupled with weakening strength of the rupee against the greenback in the last two days.

Oil Companies Advisory Committee (OCAC) will meet on Thursday to announce new prices for the period effective from November 16 to 30. Furthermore, Pakistan State Oil and other OMCs will also announce new prices of furnace oil.

In the first 13 days of this month, average crude and finished products prices in global markets fell by one to two per cent followed by downward drive in dollar value by an average one per cent as compared to last 15 days of previous month, a refinery official said.

Keeping in view the downward trend in finished products and crude prices in world markets, chances seem quite bright of a nominal price cut, another official in a refinery said. In case prices are cut on Thursday, this will be the third in a row.

Fear of petroleum development levy always looms large in every price fixation as the government imposes it at very last stage in anticipation of revenue shortage. The PDL was imposed in one of the price revisions in August by 50 paisa per litre.

On the other hand, falling consumption of oil products as well as oil prices will give a tough time both to the oil marketing companies (OMCs) and the Pakistan’s economy.

Lower consumption of oil products is a direct consequence of slack economic activity with regard to exports, and it will have a direct impact on the profitability of the OMCs, head of Research Invest Capital and Securities, Mohammad Sohail said.

Pakistan’s oil imports cost $3.5 billion annually. A change of one barrel dollar in crude price effects country’s trade balance by approximately $110-120 million (0.2 per cent of the GDP).