Oil prices in Pakistan Introduction

In Pakistan the first oil well was drilled in 1866 at seepages near Fatehjang, 25 miles west from Islamabad, producing about few gallons of oil per day. Later on in 1870 an expert B. S. Lyitaan, an American from Pennsylvania was hired to investigate the capacity of crude oil in the land of Punjab. During the 19th century there were several attempts of drilling deep shallow boreholes in the northern parts of central fold belt. After years of drilling finally from 1885-1892 three wells were discovered at Kattan in the Marri Tribal Territory of northeast Baluchistan near oil seepages from which 25,000 barrels of oil were produced.

What affects the price of fuel?

The basic principal which governs the price of the fuel is the demand and the supply of the fuel in the international market. If the supply is less than the demand of the market there will be an upward increase in the price of the fuel whereas if there is an excess of supply than the demand the prices of the fuel will go down. OPEC the Organization of the Petroleum Exporting Countries aims is to keep a stable price of the oil worldwide. Their aim to keep pricing of the oil around $30-barrel but due to many natural disasters it has become hard doing their job. (Anon., 2009)

Hurricane Katrina and Oil Prices

Another reason that the prices of oil increase is of hurricane and other natural disasters. In 2005 hurricane struck the oil production along the Southern Gulf Coast of the United States. The supply line were cut, the demand of the oil has increased which resulted an increase in the price of the oil over $70. At that time president Bush released 30 million barrels of oil from Strategic Petroleum Reserve (SPR) to bring the price of oil stable. (Anon., 2009)

War and oil prices Another reason for the price instability of oil is the war and other political instability. Middle East is the largest supplier of oil in world. Any instability in the Middle East will cause the price to hype in the rest of the world. In 2008, due to both in Iraq and Afghanistan causes the prices of oil to reach to $136 a barrel. (Anon., 2009) Oil production of Pakistan

Anon., 2009. [Online] Available at: http://oilprice.com/Energy/Oil-Prices/What-Affects-Oil-Prices.html [Accessed 08 04 2012]. Anon., 2009. [Online] Available at: http://oilprice.com/Energy/Oil-Prices/What-Affects-Oil-Prices.html [Accessed 08 04 2012]. Anon., 2009. [Online] Available at: http://oilprice.com/Energy/Oil-Prices/What-Affects-Oil-Prices.html [Accessed 08 04 2012].