As oil prices fell in global market due to steady supply and stronger dollar, the federal finance ministry has also approved reduction in the petrol price by Rs 2.94 per litre. Though many believe that the reduction is mere peanuts, it is a good sign of relief for the people before Eid. The prices of other petroleum products such as high speed diesel, kerosene oil, high octane blended component and light diesel have also been reduced.
Earlier, the oil prices had been shown a steady increase for the last over a decade due to gap between demand and supply, speculative variables and political reasons at the international level. The prices even became double between January 2004 and April 2006, putting an extra burden on economies in the third world countries, including Pakistan. However, many countries in Asia are developing at a fast rate, especially China, demanding more and more oil to meet its domestic requirements. If the global demand for oil has grown by 1.3 percent, in China alone it had been recorded at 40 percent at a point of time.
Meanwhile, the oil prices plunged to new lows after Saudi Arabia lowered the selling prices for its crude oil, lending currency to speculations that the Saudi government will hardly reduce output to keep prices above $100 a barrel in the global oil market.
With regard to Pakistan, it is energy scarce country with a few hundred thousand barrels local oil production, but facing the challenges of fluctuating oil prices at the international level. The dependency on oil is visible in Pakistan with increased demand and low production. The country has to look for other energy resources if it wants to run the wheel of its industry.
Earlier, the government used to refer increase in the petroleum prices to increase in the dollar price, but dollar has now come down from Rs 106 to Rs 100 but the benefit of a stronger rupee never reached the general public.
