In a welcome relief for Pakistan's consumers, global oil prices in the international market have witnessed massive decline paving the way for expected substantial cuts in petrol and diesel prices in the first fortnight of December 1st.

The caretaker government on November 15 had previously lowered the price of petrol by Rs2.04 per litre, diesel by Rs6.47 per litre, kerosene oil by Rs6.05 per litre and light-speed diesel (LSD) by Rs9.01 per litre.

The international market, particularly Russian crude oil, has experienced a notable downturn, with the per barrel price dipping below $60.

Brent witnesses a continuous decline

Reports indicate that the European Union has established a new standard for Russian crude oil at $60 per barrel. Concurrently, the British Brent has observed a one percent decrease, currently trading at $80.58 per barrel.

Despite the slight decline in Brent, the Russian crude's market value remains even lower than the newly set benchmark.

OPEC's role in price trends

The decline in crude oil prices parallels fluctuations in equities, influenced by factors such as China's industrial profits slowing down, posing potential risks to the world's largest crude importer.

Additionally, the Organization of Petroleum Exporting Countries (OPEC) faced challenges in reaching a consensus on supply policy, leading to a delay in their crucial meeting until November 30.

Analysts predict further reductions

Despite the ongoing challenges within OPEC and the increase in crude supply from non-OPEC+ nations, approximately half of surveyed traders and analysts expect additional measures to tighten the market.

Brent's nearly 20% drop from its late September peak, influenced by heightened supply and the diminishing risk premium related to the Israel-Hamas conflict, has further contributed to the market's volatility.

Petrol prices in Pakistan

The implications of the international market's downward trend are eagerly awaited in local markets, especially in Pakistan.

The federal government is poised to announce revisions in petroleum prices on the night of November 30, with the new rates slated to take effect from December 1, 2023.

Current petrol prices in Pakistan stand at Rs281.34 per litre, while high-speed diesel (HSD) is priced at Rs296 per litre. Reports suggest that the government is considering a substantial reduction, possibly up to Rs20 per litre, bringing a significant relief to consumers grappling with high fuel prices.