Consumers are likely to face another major increase in prices of petroleum products as rates may be jacked up by up to 10% effective February 1, 2022 following fluctuations in global crude oil prices.

Tight supply of crude and geopolitical tensions in Europe and the Middle East propelled oil to a seven-year high at $90 a barrel in the international market on Wednesday.

Tensions between Russia and Ukraine partly fuelled the increase in oil prices. US President Joe Biden has recently warned that Washington will consider imposing sanctions on Russian President Vladimir Putin if Moscow attacks Kiev.

Oil prices have also gone up after Yemen’s Houthi movement launched a missile attack on a United Arab Emirates’ (UAE) base.

These tensions, which have caused an increase in global oil prices, are also going to impact Pakistan.

According to sources, consumers in Pakistan could face an increase of Rs10.72 per litre, or 9.49%, in the price of high-speed diesel.

This fuel is widely used in transport and agriculture sectors. Any increase in its price will be felt by all people because of potential surge in inflation.

The price of petrol is likely to go up by Rs5.85 per litre, or 5.03%, from February 1. Petrol is used in cars and motorbikes and is also an alternative to the compressed natural gas (CNG).

During winter season, CNG filling stations have remained shut in Sindh and Balochistan and as a result demand for petrol will increase.

Read Petrol price hits record high at Rs147.83 per litre

The price of kerosene oil may jump by Rs10.03 per litre, or 10.09%. Kerosene oil is used in remote areas of the country for cooking purposes where liquefied natural gas (LPG) is not available.

Security forces are also the major users of this fuel in far-off areas like northern parts of Pakistan.

The price of light diesel oil is likely to swell by Rs9.17 per litre, or 8.65%. Light diesel oil is used in industries.

Among jet fuels, the price of JP-1 is expected to go up by Rs10.04 per litre, JP-4 Rs7.80 per litre and JP-8 Rs10.04 per litre.

The potential rise in prices of jet fuel, which is used in airplanes, is expected to prompt airlines to increase passenger and cargo fares.

Furnace oil may get expensive by Rs8,648 per ton from Rs98,376 to Rs107,024 per ton.

Furnace oil is used in power production, but the power sector has not been taking supplies from domestic refineries in recent months.

Oil refineries have warned the government that their plants may go offline if the current situation persists. If refineries shut down, supplies of other petroleum products like petrol and high-speed diesel may also be suspended, leading to another oil crisis in the country.

Published in The Express Tribune, January 29th, 2022.

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