KARACHI, March 30: Oil Companies Advisory Committee (OCAC) is flexing its muscles to increase the price of POL products on March 31 in its fortnightly price review. Light Arab Crude product prices, on which OCAC determines POL products’ prices, and Brent crude in the world markets have touched new peaks, thus building up pressure on the price regulators to pass on another increase on the consumers.
Murad Ansari of Khadim Ali Shah Bukhari Securities expects an increase of 2-3 per cent in the March 31 meeting of the OCAC. Crude oil prices have edged up by an average 3.5 per cent in the current fortnight as compared to last fortnight. The government had already brought down the petroleum development levy (PDL) to zero in the last price revision and thus the petroleum price structure does not have further room to absorb increase in prices, he said.
He thinks that crude oil prices, which had peaked to $57 a barrel, are likely to edge lower in the near term as the summer season is round the corner. However, a fear over limited additional supply is likely to keep the crude oil price firm.
Pakistan State Oil (PSO) and Shell Pakistan Limited (SPL) expect a pre-tax inventory gain of Rs127 million and Rs47 million respectively if OCAC raises oil prices by 2-3 per cent, he added.
However, the Mutahida Majlis-e-Amal’s country wide strike call on April 2, just a day after price revision, may build up some pressure on the government as well as its advisory body, the OCAC, to think twice before making an upward revision on March 31 fortnightly price revision.
Market analysts said that the government was least bothered by the strike and agitation on price hike issues since these kind of political tactics had failed to restrict government and the OCAC from increasing the rates. Besides, lukewarm response from the general public to frequent rise in POL price in the past further encourages the price regulators to do at their whims.
Meanwhile, the international price of Light Arab Crude (LAC) has reached to $47 a barrel in the current fortnight as compared to $45 a barrel in the previous fortnight while diesel price has peaked to $61 a barrel from $59 a barrel.
Naphta prices have touched to $452 a ton in the current fortnight, up by around $23 a ton while kerosene rates have peaked to $65 a barrel, showing a rise of $4.5 a barrel. In view of rising global oil prices – analysts are expecting a rise of 2-3 per cent in domestic oil prices.
