Fuel prices may rise as Israel-Iran war spikes oil 16%; no PDL relief: govt
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Employees at a fuel station wait for customers in Islamabad on February 16, 2022. — AFP
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ISLAMABAD: The government has rejected any deduction in the Petroleum Development Levy (PDL), as officials have warned that the Iranian -Israeli conflict could increase domestic fuel prices by 16 % in global oil rates.
According to Reuters, global oil prices fluctuated on Monday after a 7 percent increase on Friday, as new strikes by Israel and Iran raised concerns about a widespread territorial dispute over oil exports from the Middle East.
Brent Crowd Future reached 6 cents or 0.08 %, $ 74.29 a barrel, while the US Western Texas intermediate raw future reached 21 cents or 0.29 %, $ 73.19. In the session, they had increased more than $ 4 a barrel and shortly fell into the negative area.
At a meeting of the National Assembly’s Standing Committee for Finance, chaired by Naveed Qamar, on Monday, Secretary of the Secretary Aidullah Bashon said that Pakistan still has enough petroleum reserves, but emphasized that if global prices continue, local prices will have to be adjusted accordingly.
“We are keeping a close eye,” he said. “But if prices increase internationally, we too have to increase ourselves, and Levy is in place.”
Opposition leader Omar Ayub also threatened the worst point of view, saying that Pakistan was already caught in a domestic debt trap, and the controversy is likely to flourish with both the budget deficit and the trade difference.
In an extraordinary moment of the alliance, Finance Minister Mohammad Aurangzeb agreed with the opposition review and confirmed that Prime Minister Shahbaz Sharif had constituted a high level committee to oversee petroleum prices and reservoirs.
“The committee has already been met today,” he said.
Ayub went further, and called the regional crisis a pointed point. He warned that “the situation is worsening. The world is moving towards a wider war, and everything can be swept away.”
The Middle East found on Friday in a dangerous new chapter of the war, following an extraordinary increase in hostility between Israel and Iran.
In the darkness of the night, the Israeli strike on Iran’s top military and nuclear figures rapidly increased in a complete conflict, with both sides threatening heavy exchange and regional stability.
Earlier, the Finance Minister presided over the inaugural meeting of a high level committee set up to monitor petroleum prices during regional tensions, which reviewed the situation of the global and domestic petroleum market.
A press release states that in response to Israel’s recent attacks in Israel’s international oil markets and the consequent fluctuations, the geographical political situation and the consequent fluctuations, the Prime Minister has given a high level of commitment to monitor the prices of petroleum products and supply of petroleum products.
The committee is headed by the finances and includes senior representatives of key federal ministries, regulatory officials, and energy sector experts.
The committee expressed satisfaction that Pakistan currently holds proper storage of petroleum products and there is no immediate risk of disrupting supply. However, members emphasized the need for constant vigilance in view of the rapidly changing regional context.
To ensure timely response and effective harmony, a working group will oversee the daily progress, and the full committee will hold a weekly meeting to review the situation and make recommendations to the Prime Minister.
The Petroleum Division has been nominated to provide secretary assistance and ensure effective implementation of the committee’s mandate.
According to the statement, the government is fully committed to maintaining energy safety, strengthening markets and protecting national interest during this critical time.
The committee has been supplied to determine the prices of petroleum products for forward/ futures and the current dispute in the region, in addition to the prediction of the supply chain, as well as the short and medium -term pricing fluctuations.
