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The newly established government of Pakistan yesterday elevated natural gas prices by 20%. Regarding it as a tough decision, Petroleum Minister Chaudhry Mohammad Sarwar stated that the decision will enable Pakistan to bridge a 152 billion rupee deficit for the two main suppliers - Sui Northern and Sui Southern. The minister held the previous government of now-jailed Prime Minister Nawaz Sharif accountable for the huge deficit.
The OPEC meeting in Vienna yesterday ended with a decision to boost output from July after Saudi Arabia convinced Iran to cooperate. The crude prices, however, hiked by some 3%. Brent crude rose to $75.24 before slipping to around $75. WTI crude traded at $67.34. Sources have told news agency Reuters that the cartel agreed to surge production by about 1 million bpd.
BP has announced that it will raise acetic acid prices in US and Canada this July. This move comes after a force majeure recently declared by BP in April. It ascribed the increment as “necessary due to continued high raw material costs and increasing logistics costs”. BP trades acetic acid produced by the Eastman Chemical plant in Texas City under an agreement which extends till December 2031.
A top official involved with GST implementation in India has revealed that the country might follow a combination of GST and VAT systems over fuels. The peak GST rate plus VAT will be equal to the present tax incidence computed by adding Central Government’s excise duty and state government’s VAT. The Central Government might lose some Rs 20,000 crore of input tax credit if fuels are brought under GST regime.
Typically peaking during winter and summers, the LNG demand in Asia has already increased to such levels that the prices have increased by 32 percent. Since mid-April, the gas prices have soared up to $9.60/million British thermal units (Btu) and are edging to $10/million Btu. Lower domestic gas production, industrial demand, and early stock building to prepare for the coming winter are some reasons attributed to the current scenario.
Iran and Venezuela have been constantly in the news for driving the oil prices higher, with Brent Crude touching $80/bbl mark last week. However, analysts believe that the upcoming regulation of limiting sulfur in the fuel used by ships can greatly accelerate the oil prices. International Maritime Organization (IMO) has said that the global sulfur limit on fuel oil will be set at 0.5% from 2020.
The Brazilian government has responded to a week-long national truckers' strike, which led to fuel and food shortages across the country and ceded to protesters' demands yesterday. Diesel prices in Brazil were cut by 46 Brazilian cents ($0.13; £0.09) per litre. According to the daily Folha de Sao Paulo, the first five days of the strike have cost the country's economy an estimated $2.8 billion.
Santos, today, rejected Harbour’s final “take it or leave it” $10.8b bid for company’s final takeover, and henceforth, terminated all discussions. Harbour made a final offer for Santos this week after a sheer rise in global crude oil prices. The company indicated that Harbour’s offer did not represent it’s true worth and accepting their bid was not in the best of its interests.
Moody’s Investors Service has stated that ONGC and OIL might have to share the fuel subsidy burden amidst elevating oil prices. These companies used to bear the fuel subsidy burden for around 13 years, until 2015. However, the report also indicated that subsidy sharing will be manageable for both the companies. ONGC and OIL will have to endure a shortfall of Rs 9,000-28,000 crore in subsidy, entirely, or in part.
Petrol and Diesel prices scaled up new highs when they turned to Rs 84.40 and Rs 72.21, respectively, in Mumbai. According to the price notification issued by state-owned oil corporations Petrol price today increased by 33 paisa/litre in the country - the highest since the daily price revision went effective in June 2017, and diesel by 26 paisa.