KARACHI, Nov 28: The Oil Companies Advisory Committee (OCAC) is expected to announce price cut in petroleum products as a result of stable exchange rate and declining international oil prices.

“Prices may come down by two to three per cent,” oil experts and refinery operators told Dawn on Tuesday in view of falling oil prices and slight appreciation of the rupee against the dollar.

An oil analyst at a brokerage house said that on an average, the rupee had gained 0.2 per cent in the current fortnight.

Similarly, he said, oil prices, except for one notable surge last week, had either remained stagnant or showed downward trend.

Even the higher rates of war risk surcharge, imposed by the insurance companies, which has marginal effects on petroleum imports, has also gradually been coming down.

Only the element of petroleum development levy (PDL), which the government usually imposes in the last minute fearing shortfall in revenues, may add some additional cost to the existing rates. The levy of PDL ranges between 0.50 and one rupee per litre.

The government had imposed the PDL in one of the price fixation in August this year. Currently, in motor gasoline, the PDL is fixed at Rs11.40 per litre followed by Rs2.15 per litre on kerosene oil and Rs2.06 per litre on diesel.

The OCAC will meet on November 30 to announce new prices of oil products. In case prices are cut, it will be fourth in a row.

Since October 1, prices of petroleum products have seen a major cut from eight per cent to 24 per cent.

After the September 11, the international oil market was very volatile and the prices of petroleum products increased by four to seven per cent till October 1. Since then, there have been three continuous downward price revisions by the OCAC.

Meanwhile, transporters ruled out any cut in fares despite a decline of 21.4 per cent or Rs4.10 per litre in prices of high speed diesel (HSD) since October 1.

“We can cut transport fares if the OCAC provides us guarantee that diesel prices will not rise again,” President, Karachi Transport Ittehad (KTI), Irshad Bukhari, said.

He said there should be a written agreement with the OCAC that diesel prices will not rise for at least six months. However, transporters had pledged that they would announce cut in transport fares if diesel rates had come below Rs15.25 per litre. But they had not fulfilled their promise as the diesel rates have fallen to Rs15.09 per litre.