Are you tired of consistent kerosene oil price fluctuations? It is true that kerosene oil has become one of the most unpredictable types of gasoline, but there are multiple factors that impact the price of kerosene oil in Pakistan. The last kerosene oil update came on 15th May 2023, but within a few weeks, the price may go up.
Kerosene oil is used for lighting, cooking, heating, and in jets as fuel, plus there are countless other uses. But as the price trembles, the market, which is associated with kerosene oil, is also disturbed. Anyway, I will tell you about the current kerosene oil price, inform you of the web behind its price uncertainty, and what factors affect its price.
Pakistan gradually opened the doors for kerosene oil imports with the passage of time, and now the country purchases 437337 barrels per day. The huge purchase indicates that Pakistan’s economy relies 2% on kerosene oil. Because kerosene oil is used for multiple things, from fueling jets to cooking, citizens are more concerned about its price.
Like all other liquids, the kerosene oil measure unit in Pakistan is a liter. It is also sold in gallons and one gallon is equal to 3.78 liters. The kerosene oil price goes up and down according to the multiple factors that influence its demand and rates, but currently, its price is 176.8 per liter.
However, the problem with this price is that it is not constant because the price may rise and fall according to the trends of the market. For example, before covid 19 the price of kerosene oil was PKR 145 per liter but during April 2020 it reached PKR 181 per liter and it happened because of the chaos in the market. The highest price of kerosene oil was PKR 290 after covid 19, and currently, 176.8 is its managed price.
Kerosene Oil Suppliers & Price
People often complain that suppliers determine the price of kerosene oil according to their desire. They claim that PSO always provides slightly cheaper kerosene oil as compared to Shell, Total, and Hascol. The major reason why PSO rates are lower than the other kerosene oil suppliers is that PSO is owned by the government of Pakistan.
Pakistan State Oil does not make a profit like all other Total, Shell, and Hascol charges over oil that’s why its price is slightly lower than private suppliers. On the other hand, private companies charge PKR 1 to PKR 3 according to the legitimate profit determined by the government. Furthermore, PSO has a large shareholder base and a more powerful distribution network.
Kerosene Oil Price Web
Whenever it comes to the price of anything, whether it is steel, cement, or travel services, the oil prices determine rates of all other things. However the question arises of how the oil prices are designed and who controls oil prices in Pakistan. Actually, Pakistan does not have oil so it imports from major oil-rich countries such as Saudi Arabia, Kuwait, and UAE.
The price of kerosene oil is dependent upon the price of crude oil because when crude oil is refined we have different kinds of liquids, from diesel to petrol, jet fuel, or kerosene oil. If crude oil prices go up, the kerosene oil price will automatically rise. Therefore, if you are tracing the price web of kerosene oil, you will find that crude oil prices determine the price of kerosene oil all around the world.
But you should also know that it is not destined that the oil-rich countries provide crude oil at the same price to all the countries. Here, you should notice that they determine the average rates of crude oil and then kerosene oil, but they can sell their product at double rates if the country is under global restrictions or in case that country owns billions of dollars.
Who Determines The Price Of Kerosene Oil In Pakistan?
The price determination is not as complicated as the price web of the kerosene oil because when our country purchases kerosene oil from oil-rich regions, its price is based on global rates. But as oil comes to the country, different policymakers determine the taxation, levy, and duties over kerosene oil.
The major policy maker for kerosene oil is the OGRA and the Ministry of Energy determines the price with the Ministry of Finance consultation. The decision is made by all the stakeholders and they send a summary to the Prime Minister of Pakistan. If he approves the summary, then OGRA determines the oil prices.
Factors That Affect the Price Of Kerosene In Pakistan
Factor 1 (Government Tax Policy)
Basic commodities like kerosene oil are sold in massive amounts therefore, the government determines the prices in the region. The price of kerosene oil is also determined by the Pakistan government after calculating the cost of transportation and customs duty. On the other hand, the government can increase the oil price to generate more revenue support other fields, and provide subsidies.
Factor 2 (Market Trends)
Another major factor that can contribute to the price of kerosene oil is the market trend. In case the market is going down or the economy is suffering from recession then the kerosene oil price may increase or decrease. For example, in the days of covid 19, the government of Pakistan locked down the entire country, and it caused downward market trends, so the kerosene oil price fell.
But as the market opened and people started purchasing shares, the kerosene oil price went out of control and reached to PKR 290 per liter. But after a few months the kerosene oil prices started falling down and today it is about PKR 175.84. Therefore, market trends also affect the price of kerosene oil.
Factor 3 (Availability)
The oil-rich countries may decrease their oil production, which leads to a hype in kerosene oil prices. Because oil is imported, therefore, external factors influence more than internal factors. As a result, there can be two chances, and the first one is that if oil is available but in a short amount, its price will increase.
But the phenomenon I mentioned here is for normal global conditions. The second is if there is an oil-rich country in crisis and it sells oil at a low cost, then the availability will increase, and kerosene oil prices will fall down such as Russian oil has arrived in Pakistan at a low cost because Russia is unable to sell it, but it needs to sale oil to fund Ukraine war.
What is the forecast for the Kerosene price for next month?
In 2023, the crude oil price is expected to increase, and if it happens, the kerosene oil price will also increase, but for the next month, the price will be the same.
Who is responsible for fuel price revisions in Pakistan?
Pakistan’s major institute, the Oil and Gas Regulatory Authority, is responsible for price fluctuations in Pakistan.