ISLAMABAD (Kashmir English): The federal government has indicated a decrease in petrol and diesel prices in the country following the downward trend in global crude oil prices after the recent US-Iran peace deal and the reopening of the Strait of Hormuz.
Talking with a private new channel, Prime Minister’s Political Adviser Rana Sanaullah said the government is closely monitoring developments in international oil markets and expects the downward trend in global prices to positively impact domestic fuel rates.
He further said that Prime Minister Shehbaz Sharif has constituted a special committee to review petroleum pricing and assess the scope for further reductions.
He explained that petroleum prices had previously risen due to uncertainty created by the Iran-Israel conflict and concerns over possible disruptions in shipping through the Strait of Hormuz. In response to the volatile situation, the government had adopted a policy of reviewing fuel prices on a weekly basis.
According to Rana Sanaullah, oil marketing companies were compelled to purchase petroleum stocks at elevated international rates to maintain strategic reserves during the crisis period.
He rejected allegations that oil companies had unfairly profited from the situation, saying that fluctuations in the energy market result in both gains and losses over time.
“Where companies may have benefited during a period of rising prices, they will also have to absorb losses when prices move downward,” he said.
The statement came global crude oil prices have witnessed a significant decline on Wednesday as the price of Brent crude reached its lowest level since February 27, the day before the US and Israel launched war on Iran.
Benchmark oil prices fell more than $3 to their lowest level, with Brent touching a low of $73.22. U.S. crude futures slipped below $70 a barrel, the lowest level since March 2, Reuters reported.
The reason for the sharp decline in oil prices in the global market is the normalization of oil tanker traffic through the Strait of Hormuz after the US-Iran deal.
Three stranded tankers carrying 5 million barrels of crude oil were exiting the Strait of Hormuz on Wednesday, with two heading to Asia, shipping data showed, as the interim deal between Iran and the U.S. unlocks more supply stuck in the Gulf.
In addition, the prices have also come under pressure after the US eased sanctions for 60 days on Iranian crude oil exports. The move is likely to increase supply in the global market.
