The Federal Government of Pakistan hints that the petrol price in the country is expected to reduce. The reason behind this positive expectation is the decline of oil prices in the international market caused by new coronavirus variant concerns.
The oil prices abruptly declined $10 a barrel on Friday, 26 of 2021, the largest one-day drop since April 2020. This is because of Omicron, a new variant of the coronavirus, which caused fear among investors. This situation also added to concerns that a supply surplus could swell in the first quarter.
However, this decline in the oil prices with global equities markets on fears the variant could negatively affect the economic growth. As a result, fuel demand increases.
Today’s petrol price in Pakistan is relatively high compared with the international prices. However, the current reference prices for petroleum products show significant decreases, in which the role played by some key international factors is prominent. Here, we will talk about those factors:
Efforts for 50 million barrels of oil availability
The United States reported that, within its plans to lessen the prices of oil derivatives, it is making 50 million barrels of oil available to the market. The government intends to ensure the provision of raw materials to meet the needs of the national and international markets. The government recognizes the demand that remains constant and can increase during the end of the year festivities. This decision is accompanied by all important allies, including Pakistan, India, China, South Korea, Japan, and the United Kingdom. The decision is made in the context of the negation of the Organization of the Petroleum Exporting Countries (OPEC) to upsurge their production.
Revaluation of the Dollar against Other Currencies
The revaluation of the dollar against other currencies is one of the most important speculative determinants affecting the prices of hydrocarbons internationally. This factor would raise the cost for Pakistan and other economies for the acquisition of oil and derivatives, which is traded mainly in the dollar. Therefore, the acquisition of less product due to the high cost of the dollar would allow more supply in the market.
Omicron – A new variant of Covid-19
Ómicron adds much uncertainty around the world. This uncertainty added to the context of new restrictions in Europe to face the pandemic. This situation also leads investors worldwide to take their reserves in the face of a demand that could be shocked. It seems that Pakistan may face another harsh situation in the coming days. If the aggressiveness of this virus is high, Pakistan may face adverse economic consequences. These consequences could be equal to or greater than the Delta variant, which has affected much of Asia.
These events may lead Pakistan to experience declines in petroleum prices for a while. However, the expected pandemic-related restrictions and harsh IMF conditions would increase oil prices in the country.
Recommendations for the Population to Save Fuel
We provide the following recommendations for the population to save fuel:
Proper Routes: It is essential to plan your routes and schedule your outings. With this approach, you can save up to 35% on fuel.
Accelerate Progressively: You can wait for the engine temperature to become stable to demand full engine power.
Cold Start: It is useless to warm up the engine when the vehicle is not in motion. If you are running empty, you will only consume fuel.
Tire Alignment and Pressure: In case of improper pressure and misalignment, tires wear faster and push the engine to work rigidly. You can maintain them and saves up to 10% fuel.
Avoid Abrupt Accelerations and Decelerations: While driving fast, twice as much gasoline is used in every km when you surpass 100 km / h. With 140 km / h speed, you will spend 80% more than if your speed is 100 km / h.
Load Fuel at Morning and at Night: Always load fuel when the product is cold, and the best times are the early morning and night. This way, you would be loading when the fuel volume is compressed. It means you can ensure a greater volume when the fuel escalates its temperature inside the tank.
Stay with Pakistan Observer to be informed of current affairs. We hope this post about the effects of international petrol prices on economies and recommendations to save fuel was helpful to you. Although petrol price in Pakistan today is high, but there are chances that the prices might go down in the coming days, owing to the price changes seen in the global market for crude oil. Whatever happens, we will bring you all the latest news and updates regarding the topic.