Riaz Hussain
Peshawar: Despite a decline of more than two percent in international crude oil prices amid hopes of a possible US-Iran agreement and the reopening of the Strait of Hormuz, Pakistan has increased domestic petroleum prices, raising diesel by Rs2.40 and petrol by 39 paisa per litre with effect from Tuesday.
Following the latest revision, the price of petrol has increased from Rs341.59 to Rs341.98 per litre, while high-speed diesel (HSD) has risen from Rs368.29 to Rs370.69 per litre.
The increase comes at a time when global oil markets are showing signs of easing after investors began factoring in the possibility of an end to the US-Iran conflict and a restoration of normal oil shipments through the Strait of Hormuz.
According to market data, WTI crude was trading at $84.64 a barrel, down 2.78%, while Brent crude stood at $92.30 a barrel, down 2.21%. Murban crude was quoted at $101.20 a barrel, down 2.23%, while natural gas remained unchanged at $2.773.
Oil prices have recently been highly volatile because of uncertainty surrounding the US-Iran conflict and the security of shipping through the Strait of Hormuz. Expectations of reduced tensions have eased concerns over global oil supplies and put downward pressure on crude prices.
Earlier, Brent crude had fallen sharply after reports and market expectations pointed to the possibility of negotiations between Washington and Tehran and the eventual reopening of the strategic waterway, through which a significant share of global oil shipments passes.
The latest decline follows a more than five percent rise in international oil prices last week, when uncertainty over US-Iran negotiations and disruptions to oil shipments through the Strait of Hormuz pushed prices higher.
The latest increase in domestic petroleum prices is expected to add to transportation, freight and agricultural costs, while the petrol price hike will directly affect motorists.
The government’s decision to raise petroleum prices despite the recent decline in international crude prices is likely to draw attention to the factors used in determining domestic fuel prices, including exchange-rate movements, petroleum levies, taxes, duties and other adjustments.
