Due to the abrupt spread of coronavirus and a cold war between Saudi Arab and Russia over oil production, the price of crude oil has crashed to 17-year lowest in the global market. In reference to this, Pakistan has decided to introduce an oil evading plan.
Analysts are predicting that the amount of crude will reduce to $15 per barrel as two major countries Saudi Arab and Russia don’t seem to settle their issues at a certain price.
Prime Minister Imran Khan chaired a recent meeting with the director of the Finance Division to finalize the proposal for the oil hedging plan and present it before the cabinet.
Advisor to Prime Minister Dr. Abdul Hafeez Shaikh told the cabinet meeting, “The prices of petroleum products had plummeted in the international market following the collapse of an agreement between Saudi Arabia and other oil producers, led by Russia, on limiting crude production.” Furthermore, he informed the cabinet, “Finance Division was working on various hedging options to take advantage of the current low oil prices, which would slash the import bill and leave a positive impact on the national economy.”
The cabinet enforced to finalize the proposal as soon as possible and submit to the cabinet for approval.
Crude prices reach a 17-year low below $26 per barrel amid fears that the coronavirus pandemic and suppression measures could cause a global collapse. Experts believe several companies will be washed away and industries will be hit hard by the virus, resulting in low demand for energy across the world.
Oil experts in Pakistan were of the view that the government should draw up a plan to fill the available storages by importing petroleum products for future needs.
They also suggested that Pakistan could explore the possibility of renting storage in different countries to keep cheaper petroleum products there for meeting its future needs.