How will Ukraine conflict affect petrol prices in Pakistan?

• Pakistanis may see another surge in fuel prices following fluctuation in global crude oil prices.
• Analyst predicts the price of petroleum products would increase by Rs12-15 on Feb 28.
• An increase in international oil prices would inflate Pakistan’s oil import bill to a critical level.

KARACHI: Pakistanis may see another surge in fuel prices following fluctuations in global crude oil prices due to international geopolitical tensions over the Ukrainian crisis.

Amid international tensions, global oil prices jumped to $105 per barrel on Wednesday for the first time since 2014, after Russia's attack on Ukraine exacerbated concerns about disruptions to the global energy supply.

Russia launched an all-out invasion of Ukraine by land, air and sea in the biggest attack by one state against another in Europe since World War Two.

The United States and Europe have promised the toughest sanctions on Russia in response which sent the oil prices to a seven-year high level.

Read more: Why was there a hike in petrol price?

Speaking to Geo.tv AA Commodities Director Adnan Agar said if Russia attacks Ukraine, then oil price is expected to shoot to $150 per barrel in the global markets.

“If this happens, the local petrol price would spike to Rs200- 225 per litre in Pakistan,” he said, adding the increase in oil price would multiply inflation reading by a manifold.

Agar, however, said the effect of this crisis would not be highlighted in the petroleum product prices to be announced on February 28.

He predicted that the price of petroleum products would increase by Rs12-15 in the upcoming revision.

Last month, the government raised the price by Rs12.03 per litre, based on the price of Brent Crude which was at $88 per barrel then.

Read more: Shaukat Tarin defends govt's decision to hike petrol rate

“If the matter accelerates further during the next few days then the local prices will be affected massively,” he said, mentioning that on the flip side if the matter is resolved earlier oil prices in the international market will drop back to $85-90 per barrel.

Meanwhile, an increase in international oil prices would also inflate Pakistan’s oil import bill to a critical level.

The analyst further added that this Ukraine conflict has affected world economies because of the involvement of the US and UK, otherwise the issues of Kyiv would not have affected financial and energy markets around the world.

Read more: Govt mulls minimum wage hike, petrol ration card to offset impact of mounting inflation

However, some analysts believe that the petrol price in Pakistan will rise irrespective of the Ukraine crisis due to the harsh conditions of the International Monetary Fund (IMF) set before the resumption of the $6million loan programme under the External Fund Facility (EFF).