Following Interim Commerce Minister Gohar Ejaz’s recent assertion regarding a potential reduction in petroleum product prices, the Oil and Gas Regulatory Authority (OGRA) issued a statement on Monday, saying the need to avoid premature speculation about price changes.
The commerce minister, in discussions with the media on Saturday, had hinted at forthcoming positive news concerning petrol prices. OGRA’s statement underscored that petroleum product prices are predominantly influenced by international market rates and the exchange rate of the dollar.
Furthermore, the statement noted a recent surge in international petroleum prices and an improvement in the dollar-to-rupee exchange rate. OGRA highlighted that there remains one week before the official announcement of new prices, and any speculation regarding price adjustments before that time could disrupt the smooth functioning of the oil supply chain.
Additionally, Information Minister Murtaza Solangi, in recent media remarks, also suggested the possibility of a reduction in petroleum prices during the next fortnightly review. He pointed out that petroleum product prices are contingent on international oil rates and exchange rates, and due to the strengthening of the Pakistani rupee against the US dollar, there is a favorable likelihood of price reductions.
It’s worth noting that under the caretaker administration since August 1, the price of petrol has risen by Rs. 58.43 per liter, while high-speed diesel has seen an increase of Rs. 55.84 per liter.
In the most recent petroleum price review on September 15, the price of petrol had climbed by Rs. 26.02 per liter, reaching Rs. 331.38. Similarly, the price of high-speed diesel had risen by Rs. 17.34 per liter, reaching Rs. 329.18.
Earlier, in recent developments, the strengthening of the Rupee has potentially reduced the production costs for oil companies that can cause of reduction in the prices of petroleum products.
This positive effect is attributed to the Rupee’s improved exchange rate against other currencies, which, in turn, has lowered the expenses associated with importing essential raw materials and equipment required for oil production. Consequently, oil companies now have the opportunity to manufacture oil at a more economical rate.
The potential reduction in production costs holds promise for consumers, as it could lead to a decrease in the prices of petroleum products. The cost of production plays a pivotal role in determining the pricing of these products, making a decline in production expenses a significant factor to consider. If production costs continue to decrease, it may translate into lower prices for various petroleum products.