Despite the ongoing tension between the United States and Iran, crude oil prices have recorded a significant decrease of more than one dollar in the world market. Brent crude futures settled down one dollar three cents, or about 1.2 percent, at $88 a barrel. This decline has been observed due to increased supply in the global market, which may have a direct impact on the price of petrol in Pakistan. This trend in the global market may bring some comfort to the common consumer before the next price determination of petroleum products by OGRA.

Effect of global market collapse on petrol price

When the international level of crude oil comes close to eighty-eight dollars per barrel, the price formula at the local level also changes. The Ministry of Finance and the Oil and Gas Regulatory Authority calculate the local prices every fortnight based on the value of the rupee and the international rate. Although supply was expected to be affected by the war in the Middle East, increased production has kept the market under control. All traders and passengers working at petrol pumps in Karachi, Lahore, Islamabad and Peshawar are now waiting for the next price announcement.

  • The price of Brent crude oil at the global level is around eighty-eight dollars per barrel
  • Stabilization of rupee affects local rates
  • New review of prices of petroleum products by Ogra
  • Expect relief for transporters and common citizens

Impact on common man's budget and transport

Transport costs in Pakistan determine the price of everything from vegetables to daily necessities. When fuel is cheap, it should also affect fares and food. However, it has been observed in the past that the full benefit of a downturn in the world market does not reach the common man immediately as the government makes adjustments through taxes and levies. If the government provides full relief for this reduction, you may see a slight reduction in public transport fares.

What should you do now?

There is no need to panic and stockpile gasoline based on just one piece of news. Instead of believing rumors on social media, wait for official announcements from Ogra and Finance Ministry. If you run a transport or factory in Lahore, Faisalabad or any other city, use this stability to optimize your logistics costs. Also, keep an eye on the daily position of the Pakistani rupee against the dollar as a fall in the currency could wipe out the benefit of oil being cheaper in the global market.

What to look forward to

Keep a close eye on diplomatic news related to oil tanker traffic through the Strait of Hormuz and US-Iran tensions. Markets react very quickly to news and any sudden event can push prices back above ninety dollars. Wait for the notification of new prices of petroleum products from Islamabad that will clarify how much of the international savings the government has transferred to the public.