The government has decided to decrease the price of petrol by Rs5 from March 1, Finance Minister Ishaq Dar said on Tuesday, following the change in the rates of oil in the international market.
“Today is February 28, and the change in the petroleum products price will be due after 12am which means from March 1, new prices will come into effect in the country,” he said in a live address on state broadcaster PTV.
The government has decided to make no change in the price of diesel, which would stand at Rs280 per litre. The petrol rate, which now stands at Rs272, would be Rs267 after the five rupees cut.
The price of Kerosene oil, which stands at Rs202.73, would be Rs187.73 after an Rs15 decrease. In addition to this, the light diesel oil rate, which stands Rs196.68, would be decreased by Rs12. The new price would be Rs184.68.
Oil prices rose over 1% on Tuesday, erasing the previous session’s losses, as hopes for a strong economic rebound in China offset worries about US interest rate hikes dragging consumption in the world’s biggest economy, Reuters reported.
Brent crude futures for April, due to expire on Tuesday, were up by $1.30, or 1.6%, at $83.75 a barrel by 10:55am EST (1555 GMT). The more active May contract rose $1.36, or 1.7%, to $83.40.
US West Texas Intermediate (WTI) crude futures gained $1.46, or 1.9%, to $77.14 a barrel.
“We’re getting to a point where we’re seeing some short-covering because it’s the end of the month,” said PriceGroup analyst Phil Flynn.
Expectations of demand recovery in China underpinned gains, with the market awaiting key data over the next two days. Economists polled by Reuters expected that factory activity in the world’s second-largest economy grew in February.
“China’s economic recovery will drive its demand for commodities higher, with oil positioned to benefit the most,”JPMorgan analysts said in a client note. Urals crude exports to China from Russia’s Western ports rose in February from the previous month, on lower freight costs and rising demand, Reuters sources said.
JPMorgan’s oil analysts maintained their 2023 average price forecast on Brent crude futures at $90 a barrel.Gains were capped by the threat of more US rate increases after stronger than expected new orders for core US capital goods in January, with US Federal Reserve Governor Philip Jefferson saying inflation for services remained “stubbornly high”.
The voices of those expecting a 0.5% increase in interest rates by the Fed next month are getting louder, said PVM Oil analyst Tamas Varga.
The Organization of the Petroleum Exporting Countries (OPEC)has pumped 28.97 million barrels per day (bpd) this month, a Reuters survey found, up by 150,000 bpd from January. Output is still down more than 700,000 bpd from September.
The market will look to the latest US oil stocks data from the American Petroleum Institute industry group on Tuesday and the government’s Energy Information Administration on Wednesday for further demand indicators.
A preliminary Reuters poll showed analysts expect crude stocks grew by 400,000 barrels in the week to Feb 24, which would mark a 10th consecutive week of builds.
Seven analysts polled also estimated that gasoline stocks rose by about 700,000 barrels. Distillate inventories, which include diesel and heating oil, were expected to have decreased by about 500,000 barrels last week.
Oil prices are expected to rise above $90 a barrel toward the second half of 2023 as Chinese demand recovers and Russian output falls, a Reuters poll showed on Tuesday.
