ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has advised against speculation on petroleum prices, which could “disrupt” the smooth supply chain.

In a public statement on Monday, the petroleum regulator emphasised “the importance of avoiding speculations regarding the prices of petroleum products”.

Even though the statement excluded any explicit reference, the caution was apparently in response to the statements by two caretaker federal ministers, who had hinted at a reduction in prices in the next fortnightly review, due on Sept 30.

Their optimism was based on the improved value of the rupee, which has gone up by Rs16.24 against the dollar since hitting a record low of 307.1 in the inter-bank market on Sept 5.

On Monday, Ogra pointed out that the prices are determined on the basis of international market prices and the exchange rate.

While the exchange rate “has shown improvement”, there is still one week remaining before the announcement of new prices.

It also added that there has been a surge in international prices recently, implying that it could offset the anticipated relief.

“Therefore, any speculation about price increases or decreases during this period is highly speculative and could potentially disrupt the smooth functioning of the oil supply chain.”

An official involved in the pricing process said the international prices are going up while the exchange rate is slowly coming down, but there are also some outstanding adjustments that may need to be allowed to oil marketing companies (OMC).

“Price movement could go either way over the remaining five days.”

Similar views were expressed by the caretaker petroleum minister, Muhammad Ali, who said at a news conference that it was very premature to predict prices as the rupee had strengthened while international prices had appreciated.

In the past, the regulator routinely urged journalists not to speculate on petroleum prices even when it formally sent working papers to the government a day before the announcement of new prices.

However, this time, the federal cabinet ministers started the speculations a week after the government increased the prices by Rs26 per litre. The massive surge came on the back of cash flow constraints, dwindling foreign exchange and high financing costs.

Between August 15 and September 15, petrol and high-speed diesel (HSD) prices have increased by Rs58.43 and Rs55.83 per litre, respectively.