Petrol price in Pakistan today is mainly about the refinery side of the market. International petrol prices have fallen below the price of Dubai crude oil, the reference crude in the latest data, and that has pushed refining margins below zero for the first time in recent history. The figures track international markets, so they do not by themselves show what drivers pay at Pakistani pumps.
How the price gap opened
Refining margins, also called cracks, are the gap between what refined products sell for and what the crude oil used to make them costs. When petrol sells for less than that crude, refiners lose money on each barrel of petrol they produce. Topline Research said the seven-day rolling average margin fell to negative $1 a barrel as of November 6, while the daily margin dropped to negative $5 on November 5.
Topline Research put international petrol at $105.90 a barrel on November 6, compared with $106.90 for Dubai crude. Petrol and Dubai crude moved fairly closely through much of October, then both fell sharply toward the end of the month. By November 5, the petrol price drop had carried petrol below crude, and that is what turned the margin negative. The trend appears in international price data compiled by the Oil and Gas Regulatory Authority (OGRA), Pakistan's oil and gas regulator, and Topline Research.
Why the Rs49 levy adds pressure
Domestic refiners were already dealing with a levy of Rs49 per litre on petrol, which was recently imposed. The combination of negative international margins and this levy is expected to squeeze refinery profitability further. The levy is a domestic charge, so it adds cost on top of the international squeeze.
For readers tracking petrol price news in Pakistan, the number to watch is the gap between petrol and crude prices. How long the margin pressure lasts, and whether it will affect the prices Pakistanis pay, remains unclear from the figures.
Timeline: what has happened so far
- Much of October: international petrol and Dubai crude prices move relatively closely.
- Late October: both prices fall sharply toward the end of the month.
- November 5: petrol drops below Dubai crude, and the daily refining margin reaches negative $5 a barrel.
- November 6: the seven-day average margin is negative $1 a barrel, with petrol at $105.90 and crude at $106.90.
Aasan alfaaz mein
Pakistan ki refineries ko is waqt nuqsan ho raha hai, kyunki international petrol ki qeemat Dubai crude se neeche chali gayi hai. Topline Research ke mutabiq 6 November tak petrol 105.90 dollar aur crude 106.90 dollar per barrel tha. Is ke saath Rs49 per litre levy bhi refineries par dabao barha rahi hai. Pump par qeemat kya hogi, yeh in figures se abhi wazeh nahi hai.
