KARACHI, Oct 14: The Oil Companies Advisory Committee (OCAC) meets on October 15 to announce the fortnightly price adjustment amid confusion owing to increase in average global price of crude oil to $27.50 per barrel in the current fortnight as compared to $27.41 per barrel.
An average FOB price comparison of oil products shows that naphtha prices in the region dropped to $237 a barrel in the current fortnight from $239.39 a barrel in the previous fortnight. Naphtha is a basic raw material of petrochemical industries and Japan is the leading buyer of it.
As a result of drop in global naphtha prices, there is a slight chance of decrease in the domestic petrol prices. But a lot depends on the decision to be taken by the OCAC on Tuesday.
Chances of a cut in local diesel prices, being determined by the oil marketing companies (OMCs) after deregulation, are slim as the global price has surged to $31 a barrel from $29 in previous 15 days. Global gas oil prices had been on the rising trend for the last one-and-a-half month. It was $28.24 per barrel a month back.
A refinery operator said that diesel prices were going up as a result of regional winter buying.
Kerosene prices had further gone up to $32 a barrel in world markets from $31.76 a barrel. It was available at $30.38 a barrel prior to US-Iraq tension. Its price has gone up due to looming US attack fear on Iraq as kerosene is being mixed up to produce jet fuel.
Fuel oil prices in global markets have declined to $160 a barrel in the current fortnight as compared to $162 a barrel in the previous one. A refinery official said that global buying of fuel oil had declined as refineries world over are currently emphasizing on “diesel maximization” due to its rising demand.
As a result of decline in world fuel oil prices, oil marketing companies (OMCs) may consider another reduction in prices on Tuesday. OMCs had reduced the local fuel oil prices by one per cent in the last fortnight price adjustment.
In the above global price review, there is a slight chance to see price reduction in petrol and fuel oil by one to two per cent while in other categories like diesel and kerosene, prices may go up, an oil analyst said, adding that may be the OCAC comes out with a simple statement on Tuesday of making no changes in domestic oil prices or announce the price decline only in petrol.
In case domestic petrol price is curtailed the government may increase the Petroleum Development Levy (PDL) to take the benefit of global price fall in petrol. The government had already cut the PDL on petrol in the last two fortnights by 37 paisa a litre to offset the impact of global prices and protect the local consumers.
In other items like diesel and kerosene, whose international prices had already been going up, the government had taken a hit on revenue collection by cutting the PDL twice by 84 paisa and 119 paisa per litre to mitigate the impact of global price hike to the end user. It is not clear whether the government will again take a third straight hit on itself or maintain the PDL.
During the current fortnight the rupee-dollar parity has remained the same.
