A major drop is expected in the petrol and diesel prices in Pakistan, following a decrease in the international oil prices.
The government is expected to cut petrol rates by Rs13 per litre and diesel by Rs8 to Rs9.50/litre on May 16 for the next fortnight revision, according to The News.
The English daily attributed such a big slump to the falling global prices after stability in the Middle East returned following the Iran-Israel missile attacks and reduction in the Red Sea tension.
If approved, it would be another relief in the fuel prices for the people in Pakistan. Last month, the government slashed the price of petrol and high-speed diesel for the next fortnight by Rs5.45 and 8.42, respectively.
The current petrol price is Rs288.49 per litre and that of HSD is Rs281.96.
Oil prices extended declines on Monday amid signs of weak fuel demand and as comments from US Federal Reserve officials dampened hopes of interest rate cuts, which could slow growth and crimp fuel demand in the world’s biggest economy, Reuters reported.
Brent crude futures slid 26 cents, or 0.3%, to $82.53 a barrel by 0025 GMT while US West Texas Intermediate crude futures was at $78.03 a barrel, down 23 cents, or 0.3%.
Both benchmarks settled about $1 lower on Friday as Fed officials debated whether US interest rates are high enough to bring inflation back to 2%.
Analysts expect the US central bank to keep its policy rate at the current level for longer, supporting the dollar. A strong greenback makes dollar-denominated oil more expensive for investors holding other currencies.
Oil prices also fell amid signs of weak demand, ANZ analysts said in a note, as US gasoline and distillate inventories rose in the week of ahead of the start of the US driving season.
Refiners globally are struggling with slumping profits for diesel as new refineries boost supplies and as mild weather in the northern hemisphere and slow economic activity eat into demand.
Still, the market remained supported by expectations that the Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, could extend supply cuts into the second half of the year.
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Iraq, the second-largest OPEC producer, is committed to voluntary oil production cuts agreed by OPEC and is keen to cooperate with member countries on efforts to achieve more stability in global oil markets, its oil minister told the state news agency on Sunday.
The minister’s comments followed his suggestion on Saturday that Iraq had made enough voluntary reductions and would not agree to any additional cuts proposed by the wider OPEC+ producer group at its meeting in early June.
Earlier this month, OPEC+ called out Iraq for pumping over its output quota by a cumulative 602,000 barrels per day in the first three months of 2024. The group said that Baghdad had agreed to compensate with additional production cuts over the rest of the year.
