Pakistan's Oil Industry Bracing for Price Shock Amid Middle East Disruptions
Pakistan's oil industry is facing mounting concerns over the availability and cost of crude oil and petroleum products due to price hikes in the Middle East and repeated changes in the domestic pricing formula.
Industry officials fear that suppressing international prices through adjustments in the pricing mechanism, rather than reducing government taxes and levies, could discourage imports and create a shortage of petroleum products in the country.
The Oil and Gas Regulatory Authority (Ogra) uses a seven-working-day rolling average of Platts Cash Dubai as the crude base for calculating high-speed diesel prices. Market data shows a sharp increase in regional crude complex, with Dubai Mo01 (NextGen MOC) at $122.01 per barrel, up 11.21%.
Industry sources said suppliers were factoring regional supply risks into their offers, making it difficult to secure cargoes at normal premiums, and forcing importers to pay higher premiums.