Global Oil Prices Decline: Will Pakistan Reduce Petroleum Product Prices from June 1?

Islamabad: A fresh decline in global oil prices has been observed, raising questions about whether the Government of Pakistan will reduce petroleum product prices from June 1. Experts believe this drop in prices is linked to the anticipated decision by OPEC+ to potentially increase oil production, which could lead to higher global supply. The key OPEC+ meeting is expected to take place at the end of this week.
On Tuesday, Brent crude oil futures closed at $64.62 per barrel, down 12 cents or 0.19%, while U.S. West Texas Intermediate (WTI) crude dropped 15 cents or 0.24%, closing at $61.38 per barrel.
According to Daniel Hynes, Senior Commodity Strategist at ANZ Bank, “The decline in crude oil prices reflects market expectations that OPEC may increase production, which would boost global supply.”
Eight major OPEC+ member countries, which had previously agreed to voluntary production cuts, are scheduled to attend the meeting on May 31 — a day earlier than initially planned, according to three sources cited by Reuters.
Despite the significant decline in global crude oil prices, the Government of Pakistan has yet to implement a corresponding reduction in local fuel prices. Economic analysts suggest that the government could have reduced fuel prices by Rs. 15 to 20 per liter over the past two months. However, due to the country’s fragile economic condition, the benefit has not been passed on to the public.
Instead, the government has attempted to offer relief through a marginal reduction in electricity tariffs.
Pakistan reviews petroleum prices every 15 days, but based on previous trends, a major price cut from June 1 appears unlikely.