Why Petrol Doesn’t Quickly Get Cheaper in Pakistan

Crude oil prices experienced a significant drop on Tuesday, with Brent crude falling below $100 per barrel. However, Pakistani consumers are still awaiting a substantial decrease in petrol prices. It may take another week before the cheaper crude translates into lower petrol prices for Pakistan. The Petroleum Division calculates daily fuel prices based on a seven-working-day rolling average of international market prices, which is the primary reason why petrol prices in Pakistan do not adjust rapidly when international oil prices plummet.

At present, Brent is trading at approximately $99.70 per barrel, while West Texas Intermediate (WTI) is near $91. Murban crude is trading at around $114 per barrel. The recent decline in oil prices has been due to market vigilance on possible progress in talks between the United States and Iran. A favorable resolution could alleviate concerns about further supply disruptions in the region.

However, the decline in oil prices has not been consistent. International traders anticipate further price reductions following the United Nations General Assembly session and developments surrounding US-Iran talks. Some traders who had bet on lower oil prices are now liquidating those positions while awaiting clearer signals from the diplomatic negotiations.

The Group of Seven (G7) foreign ministers have urged Iran to cease supporting Yemen, but their call holds little weight.