KARACHI, July 30: Like past fortnights, the domestic oil price hike, keeping with trend in world market, looks imminent for July 31 price revision but the Oil Companies Advisory Committee (OCAC) , a cartel of oil marketing companies, in all probability will opt to maintain the price freeze for another 15 days.

Federal Petroleum Minister, Ch. Nouraiz Shakoor had already hinted at, in a Parliament session two days back, maintaining oil price as long as international oil crisis looms.

To provide relief to the common men in the wake of increasing trend in oil prices, the government has been taking a hit on itself by lowering the petroleum development levy (PDL) since May 15, 2004 in order to lessen the burden on common men of surging world oil prices.

Consumers are now in quandary as for how long the government would be able to absorb the impact of rising international oil prices by cutting the PDL. An analyst at Khadim Ali Shah Bukhari says that assuming that the government would not pass on the international oil price increase to the end-users is unrealistic assumption.

He says that the government would pass on to the consumer a major portion of the increase after Shaukat Aziz's election. Sources said that this government, following the past practices of the successive governments, has also kept the option of price fluctuations in its hand in order to win sentiments of the general public.

They said that it would be interesting to watch the government's next step when international oil prices start falling. It is feared that the PDL, currently being lowered to offset the negative impact on consumers of rising world oil prices, will again be increased to recover the lost revenues.

The world oil price fall and the take-over of Shaukat Aziz as a new premier, hopefully in coming months, will be watched with added interest by many oil sector analysts when the government will pass most of the rising world oil price hike on to the end users.

PDL, a main source of government revenue, had fluctuated significantly in the past, often in an ad hoc manner, usually following political considerations. A refinery operator, who declined to be quoted, dispelled the impression that the consumers will be the losers when PDL will be adjusted upwardly after the fall in international price in order to recover the previous revenue losses.

He said that the government would gradually recover its losses by adjusting PDL, but the consumers were unlikely to feel the hard pinch at that moment. The government has the prerogative to adjust the PDL which accounts for a significant amount of government revenue from the petroleum products.

The government sometimes adjusts the PDL to lessen the movement of end-user prices to consumers resulting from changes in import parity prices (IPP). However, he said that chances of falling oil prices seem a remote possibility as the international market is highly volatile due to geo-political situation in the Middle East, fear of oil supply disruptions, beginning of winter season in the US and high oil demand from China and India and crisis of supply from Russia.

He said that the average Light Arab Crude price is still trading at $36 a barrel as compared to $35 in May. Product prices like diesel is trading at $45.5 per barrel as compared to $41.38 in July 14 and $40 in May.

Similarly, naphta price, a main raw material of making petrol, is being traded at $355 per ton as compared to $317 per ton while in May it was hovering between $335-340 per ton.

Government's revenue through PDL has been bottoming out as the national exchequer is now getting Rs1.1 per litre on diesel as compared to Rs3 per litre in May. On petrol, PDL is being charged at Rs9.19 per litre as compared to Rs9.50 in May. The government must have missed the target of Rs45 billion as revenue earning through PDL for July-June 2003-2004.