Four percent cut likely in prices of oil products on November 15

KARACHI (November 14 2002) : Oil Companies Advisory Committee (OCAC) might reduce oil products prices by as much as 4 percent after decline in world oil prices and strengthening of rupee against the dollar. The OCAC, constituted in July 2001 after the government deregulated the oil sector, fixes prices for a fortnight. The next price revision is due on Friday (November 15). According to an analyst, during the last fortnight the average oil prices worked out at $ 25 a barrel from $ 28 a fortnight ago, while the value of rupee rose versus the dollar. During the fortnight, the rupee strengthened by nearly 28 paisa to Rs 58.60 to a dollar. The prices are likely to be adjusted downward, giving some comfort to the people, especially to transporters. The transporters association observed strike for a day as the oil companies had raised the prices of diesel by 4.5 percent, to Rs 21.98 a litre. The association urged the government to cut the prices or allow them to increase the fares. They withdrew strike call because of Ramazan but cautioned the government that if their demands were not met after this month they would observe another strike. The association urged the government to link the bus fares to oil price adjustment. An analyst said that prices in the international market eased up during the fortnight after the threat of attack on Iraq from the US diminished. But the recent developments revealed that the war clouds are still hovering and in the next two weeks the prices are bound to rise. The civilian government would face difficulty to adjust the oil prices after the climb in international prices expected upon the attack on Iraq from the US. However, the government might skip any upward change as it might cut the petroleum development levy to mitigate any prices increase at the international markets.