Hike in oil prices to accompany change in calendar
A summary has been sent to government regarding the change in oil prices.
The recent increase in international oil prices will be reflected in the local market next month, according to a research report prepared by Topline Securities.
Oil prices (West Texas Instrument – WTI) in the international market went up only 14 per cent in 2010 after a record gain of more than 78 per cent in the preceding year. Like other commodities, uncertainty on the global economic situation affected prices, which moved in the band of $65 to $91 per barrel.
During the year, crude oil prices dropped to a low of $64.5 on May 25 and quite recently touched a peak of $91 per barrel on December 23.
In the local market, however, retail prices of regulated products increased by only 11-13 per cent. “This is primarily due to the fact that the impact of international oil prices on local oil products comes with a one-month time lag,” wrote Farhan Mahmood from Topline. “And that is why the price hike will be reflected next year in January.”
The local pump prices of petrol and diesel, which jointly constitute 85 per cent of total regulated oil products, rose by 11 per cent each. Thus, high speed diesel (HSD) – which has historically remained lower than gasoline until 2008 – is closing the year priced Rs5 per litre more than gasoline following the imposition of a higher tax rate.
Though oil prices remained volatile during the outgoing year amid global financial woes and turmoil in currency markets, average WTI crude oil prices stood at $79 per barrel compared with the average price of $62 a barrel during 2009, a 27 per cent increase.
Moreover, the international price of Arab light crude oil – the benchmark for local exploration and production (E&P) firms – increased by 18 per cent in 2010. “This is primarily due to higher demand from China and India, which together contribute more than 45 per cent of total Asia-Pacific crude oil demand,” highlighted Mahmood.
Trend
Source: Topline Research
Summary forwarded
The Oil and Gas Regulatory Authority has forwarded a summary to the government to push up prices of petroleum products by between Rs3 and Rs5 per litre with effect from January 1, 2011. According to sources, the per litre price increases will be: Rs3.45 for petroleum, Rs3.9 for diesel, Rs4.33 for HOBC and Rs3.54 for kerosene. An official notification in this regard is expected on Friday.
Published in The Express Tribune, December 30th, 2010.
Oil prices (West Texas Instrument – WTI) in the international market went up only 14 per cent in 2010 after a record gain of more than 78 per cent in the preceding year. Like other commodities, uncertainty on the global economic situation affected prices, which moved in the band of $65 to $91 per barrel.
During the year, crude oil prices dropped to a low of $64.5 on May 25 and quite recently touched a peak of $91 per barrel on December 23.
In the local market, however, retail prices of regulated products increased by only 11-13 per cent. “This is primarily due to the fact that the impact of international oil prices on local oil products comes with a one-month time lag,” wrote Farhan Mahmood from Topline. “And that is why the price hike will be reflected next year in January.”
The local pump prices of petrol and diesel, which jointly constitute 85 per cent of total regulated oil products, rose by 11 per cent each. Thus, high speed diesel (HSD) – which has historically remained lower than gasoline until 2008 – is closing the year priced Rs5 per litre more than gasoline following the imposition of a higher tax rate.
Though oil prices remained volatile during the outgoing year amid global financial woes and turmoil in currency markets, average WTI crude oil prices stood at $79 per barrel compared with the average price of $62 a barrel during 2009, a 27 per cent increase.
Moreover, the international price of Arab light crude oil – the benchmark for local exploration and production (E&P) firms – increased by 18 per cent in 2010. “This is primarily due to higher demand from China and India, which together contribute more than 45 per cent of total Asia-Pacific crude oil demand,” highlighted Mahmood.
Trend
| Year-end prices International ($/barrel) | 2009 | 2010 |
| West Texas Intermediate (WTI) | 79 | 91 |
| Arab light crude oil | 78 | 92 |
| High speed diesel (HSD) | 81 | 102 |
| Furnace oil (per ton) | 460 | 504 |
| Local (Rs/litre) | ||
| Petrol | 66 | 73 |
| Kerosene | 63 | 71 |
| LDO | 60 | 67 |
| High speed diesel (HSD) | 71 | 78 |
| CNG (per kg) | 49 | 55 |
| Furnace oil (per ton) | 48,058 | 53,304 |
Source: Topline Research
Summary forwarded
The Oil and Gas Regulatory Authority has forwarded a summary to the government to push up prices of petroleum products by between Rs3 and Rs5 per litre with effect from January 1, 2011. According to sources, the per litre price increases will be: Rs3.45 for petroleum, Rs3.9 for diesel, Rs4.33 for HOBC and Rs3.54 for kerosene. An official notification in this regard is expected on Friday.
Published in The Express Tribune, December 30th, 2010.