Rising Oil Shipping Costs Could Put Pressure on Pakistan Fuel Prices
Pakistan could face additional pressure on domestic fuel prices in the coming weeks as international crude oil shipping costs have increased sharply.
The cost of transporting a 2-million-barrel crude oil shipment from West Africa to China has reportedly risen to around $23.59 per barrel, compared with approximately $6.50 per barrel in July. This represents an increase of about 258 percent in two months.
Higher Freight Costs Add to Fuel Import Bill
The international price of crude oil is not the only factor that affects the cost of fuel in Pakistan. Shipping charges, insurance, freight and other supply-chain expenses also influence the final cost of imported petroleum.
Pakistan relies significantly on imported crude oil and petroleum products. As a result, a prolonged increase in transportation costs could add to the country’s overall fuel import bill.
As of September 18, petrol in Pakistan was close to Rs. 390 per litre, while diesel remained above Rs. 400 per litre, according to the report.
A further increase in shipping costs could therefore put additional pressure on domestic fuel prices, even if international crude oil prices do not rise at the same pace.
Moscow Oil Refinery Hit in Drone Attack
Global energy markets are also being affected by disruptions involving oil infrastructure.
On September 19-20, Ukraine carried out a large drone attack targeting areas around Moscow. Russian authorities said more than 1,600 drones were intercepted, while the Moscow Oil Refinery was among the facilities damaged in the attacks.
The refinery is a major oil-processing facility and damage to its operations could add further uncertainty to regional fuel markets.
Earlier, US President Donald Trump had said that Ukraine and Russia had agreed to avoid attacks on energy infrastructure. However, reports indicate that strikes on energy facilities have continued, with the status and scope of any such arrangement remaining disputed.
What It Means for Pakistan
For Pakistan, the next fuel-price review could depend on several factors, including international crude prices, shipping costs, insurance expenses and other import-related charges.
If international freight rates remain elevated, the cost of bringing petroleum supplies into Pakistan could increase, potentially adding pressure to the country’s fuel import bill and domestic prices.
