Crude futures surpassed $85 per barrel for the first time in three years today, a development that may prompt Pakistan to further increase petrol prices.
The Pakistani government may announce another hike to petrol prices as Brent oil futures continue to soar. The Oil & Gas Regulatory Authority (OGRA) may suggest a further hike to petroleum prices of up to Rs. 9 in the next 16 days.
The global energy crisis has resulted in the inflation of natural gas and coal prices, with costs hitting record highs. Now, the crisis is spilling into oil markets, with Brent oil futures soaring past $85 per barrel. This comes as manufactures and consumers start to switch to oil as an alternative energy resource to natural gas and coal.
The prices of liquified natural gas have jumped over the past few months amid a spike in energy demand as countries emerge from the COVID-19 economic slowdown. With Asian LNG spot prices surging over $56 million per metric million British thermal units (mmBtu), countries are considering using alternate energy sources such as oil to meet demand.
The International Energy Agency said, on Thursday, that this switch could lead to an additional 500,000 barrels a day of demand in the next few months.
Soaring international energy prices have forced Pakistan to raise petroleum prices. On 1 October, the government raised the price of petrol by Rs. 4 per liter and high-speed diesel by Rs. 2 per liter. Meanwhile, the prices of kerosene oil and light diesel oil were raised to Rs. 7.05 and Rs. 8.82 per liter, respectively.
Now, OGRA is considering an additional hike in prices. However, according to sources, the final decision will be announced by the finance ministry after consulting with the prime minister and the finance minister, who is currently attending meetings with the International Monetary Fund (IMF) in Washington.