On Tuesday, global oil benchmark Brent crude futures dropped below $70 a barrel for the first time since December 2021, following OPEC+’s downward revision of its demand forecast for this year and the next. Brent crude futures fell by $2.61, or 3.63 percent, to $69.23 a barrel at 1616 GMT, while US West Texas Intermediate (WTI) crude dropped by $2.85, or 4.15 percent, to $65.86. Both benchmarks had increased by 1 percent on Monday but saw declines of over $3 during the session.
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Impact on Pakistan
A recent report by brokerage firm JS Global highlighted that the decrease in global oil prices is likely to benefit Pakistan, which is a net oil importer. The lower oil prices are expected to reduce Pakistan’s import bill and further support the trend of disinflation. This scenario provides the government with a favorable position to offer additional relief on petroleum product prices.
Moreover, the reduction in oil prices presents an opportunity for the government to potentially increase the petroleum development levy (PDL).
