Crude oil prices fell sharply on Tuesday. Brent crude slipped below $100 per barrel but Pakistani consumers are still waiting for a meaningful drop in petrol prices.
For Pakistan, it can be another week before cheaper crude means cheaper petrol. The Petroleum Division calculates daily fuel prices using a seven-working-day rolling average of international market prices. This is one of the main reasons why petrol prices in Pakistan do not fall quickly when international oil prices plunge.
More specifically, a seven-day rolling average of international benchmarks like the Platts Arab Gulf Means Price is being used by the Petroleum Division to determine prices these days.
At the time of press, Brent was trading at around $99.70 per barrel, while West Texas Intermediate (WTI) was near $91. Murban crude was trading at around $114 per barrel.
Oil prices have been under pressure as markets watch for possible progress in talks between the United States and Iran. Any progress could reduce fears of further supply disruptions in the region.
However, the recent fall in oil prices has not been a straight line. International traders still expect rates to fall further after the United Nations General Assembly session and developments around US-Iran talks.
Also, traders who had bet on lower oil prices are now closing those positions while they wait for clearer signals from the diplomatic talks.
The Group of Seven (G7) foreign ministers have also called on Iran to stop arming Yemen. Their plea carries no weight.
The post Why Petrol Doesn’t Quickly Get Cheaper in Pakistan appeared first on ProPakistani.
