Govt considering option to review petroleum prices on weekly basis

August 04, 2022 (MLN): The government is considering the option to review petroleum product prices on a weekly basis, sources told Mettis Global on Thursday.  

At present, the government announces the price of petroleum products on fortnightly basis.

This weekly price review will overcome the erratic movement in global prices and help to minimize inventory losses.

This move will also help consumers as the benefit of a drop in oil prices could be passed to them within a timely manner.

As per practice, the government on Sunday announced petroleum prices wherein it reduced the price of petrol by Rs3.05 per litre and increase the price of diesel by Rs8.95 per litre on the back of fluctuations in petroleum prices in the international market and exchange rate variation.

The government has also doubled the amount of petroleum levy on all petroleum products. Accordingly, Rs20 per litre will be charged on petrol while Rs10 will be charged on kerosene and LDO each in terms of petroleum levy. 

To note, in the international market, the oil prices retreated on Thursday after an unexpected rise in US crude inventories and in the aftermath of the OPEC+ decision to increase output for September.

At the time of writing, the international benchmark Brent crude was trading at $96.89 per barrel compared to the previous close of $96.78 a barrel.

Meanwhile, the American benchmark West Texas Intermediate (WTI) was at $91.13 per barrel at the same time compared to the previous session closed at $90.66 a barrel.

The data released by the Energy Information Administration (EIA) on Wednesday showed that US commercial crude oil inventories increased by 4.5 million barrels to 426.6 million barrels during the week ending July 29 against market expectations of a fall of 467,000 barrels. The surge in oil production may further ease the prices ahead.

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