KARACHI, April 8: Confusion now prevails on the oil market whether the next fortnightly price review on April 15, will face the same fate (April 2) of delaying the price announcement as well as keeping them unchanged despite higher oil prices in international markets.

Oil analysts predict a price surge in domestic oil prices on April 15 review in view of mounting oil prices in global markets. The Middle East tension has already pushed up the oil prices above $27 a barrel. It came down to around $26 a day back but again jumped to $27.35 a barrel on Monday following suspension of supply of crude oil by Iraq all over the world in favour of Palestinians. Though Pakistan does not buy crude from Iraq but its impact in shape of rising oil prices worldwide cannot be overlooked.

OMC, refineries and OCAC officials are tight lipped over the next price revision, saying it is premature to analyse the situation at this moment.

But oil market analysts say that as long as the referendum process is not completed in the first week of May, the government may interfere again on April 15 to cap the prices, which it did in last fortnight price review.

Originally the oil prices in the previous fortnight had gone up by $1 to $1.5 a barrel but its impact of three to five per cent increase on domestic oil prices could not be passed on to the consumers. Analysts said that the same situation exists as the international oil prices are on the rise following Middle East tension.

“If the domestic oil prices continue to be capped in future reviews, then consumers will face a sudden jerk after referendum process,” analysts said.

The OCAC, OMCs and even Petroleum Ministry on April 2 did not come up with any statements as to why the prices of petrol, diesel, kerosene, HOBC and light diesel had been kept unchanged despite increase in global oil prices by $1 to 1.5 per barrel in the last fortnight as compared to previous fortnight.

Diesel prices will be watched with added interest on April 15 review as its prices was not increased for the second consecutive time. It should have been increased on March 15 review by about 3.2 per cent.

Analysts at Taurus Securities said that the fixed petroleum development levy charge has been adjusted downward in the April 2 price review to absorb the effect of higher ex-refinery prices while keeping the final sales price unchanged and OMCs margins have also been kept constant.

As no official breakup of the new oil prices had been announced, it seems that the full one per cent increase in oil companies’ commission is not yet incorporated.

Mohammad Sohail of Invest Cap said surge in crude oil prices in world market means some pressure on the all time forex reserves of $5.2 billion (import cover of 27 weeks).

There may see some pressure on the Pak rupee coupled with slight increase in interest rates in the country if oil at $26-27 per barrel and other commodity prices currently prevailing in the world market persists, he says.

Assuming that the current oil prices sustain between $25-27 a barrel, Pakistan will post an additional outflow of $200-300 million on account of additional oil payments. According to an estimate, the import bill may cross $2.5 billion in 2001-02 if the current situation prevails as against $2.3 billion envisaged earlier this year, he said.