HSD prices expected to rise by more than Rs 10 per liter Oil industry insiders say the increase in HSD demand was unexpected. HSD’s average daily sales have jumped to 24,000 liters: sources
KARACHI: Prices of petroleum products may rise by up to Rs 10 per liter in an upcoming review in the wake of soaring global oil prices, The News reported on Saturday.
According to oil industry estimates, petrol prices may rise by Rs 3-4 per liter and high speed diesel (HSD) prices are expected to rise by more than Rs 10 per liter.
Due to the soaring global crude oil prices, HSD prices are expected to increase by more than 10 rupees per liter in the next price review.
Demand for petroleum products, especially HSD, has surged significantly in recent days on expectations of price hikes in the next bi-weekly review.
Oil industry officials said the increase in HSD demand was unexpected as there was no significant increase in demand from the industrial or agricultural sectors.
“This soaring price is mainly due to dealers buying up petroleum products, especially HSD, in anticipation of price hikes,” they explained.
Industry experts pointed out that HSD’s average daily sales volume has jumped to 24,000 liters per day, compared to the usual 16,000-17,000 liters per day.
They dismissed claims that the government’s anti-smuggling crackdown was contributing to the increase in legal HSD sales.
“Oil marketing companies (OMCs) and dealers, mainly, are stockpiling to maximize profits ahead of the expected price hike,” they said.
Refinery executives acknowledged the recent surge in HSD sales.
“We are selling more HSD than usual, but we don’t know if this is due to panic buying by oil marketing companies and dealers ahead of the price hike,” the official said.
He added that the true demand for HSD will become clear after the price review and it will become clear whether the increase in sales is due to true demand or hoarding.
In recent months, the country has faced a diesel oversupply due to weak consumption. Due to several factors such as smuggling, the demand for HSD decreased from 750,000 tonnes per month to just 500,000 tonnes.
In a letter to the government some time ago, the Oil Companies Advisory Council (OCAC) said: “If demand falls, local refineries could easily meet around 80% of the country’s demand.” .
The letter opposed the government’s decision to allow private oil marketing companies to import HSD.
“While there is no valid reason to import excess HSD, imports have been permitted in recent months, creating severe oversupply and operational challenges for local refineries,” OCAC said.
