ISLAMABAD: The United States and Israel face ongoing military conflict with Iran, which causes rising crude oil prices that disrupt global economic systems. The public in Pakistan faces severe financial difficulties because petrol prices have increased.
The price of petrol rose by Rs. 55 per litter yesterday, which creates additional economic difficulties for the citizens.
Talking to a private news channel ARY News, Economist Dr. Khakan Najib explained, how the current geopolitical conditions have resulted in higher fuel prices.
He explained that the government has raised the petroleum levy on a litter of petrol from Rs. 84 to Rs. 105.37, which creates a financial burden for motorcycle riders who belong to the lowest income group. The total cost which includes import duties reaches a price range between Rs. 125 to Rs. 130 per litter.
Dr. Najib confirmed that Brent oil prices stand at $105 today because they reached $119 this morning. The price drop happened because GCC countries chose to release their strategic reserves, which resulted in Brent oil prices reaching a stable value.
He explained that a Brent oil price drop from $105 to $85 would result in petrol price drops between Rs. 25 and Rs. 30 per liter.
He explained that the Strait of Hormuz must open for transportation to resume before the process can stabilize. The establishment of a ceasefire must be a goal to attain the former, which must last for a minimum period of one to one and a half months.
The current situation shows no signs of improvement, which will drive fuel prices higher in the future. People should control their energy consumption, according to Dr. Najib so that they can handle the current situation.
