6 Ways In Which Oil Crash Can Benefit Pakistan

Earlier this week, oil prices went negative for the first time in history as market demand drastically dropped amid the global COVID-19 outbreak. On Tuesday the prices did bounce back into positive numbers but the cost per barrel still remains significantly low.

The coronavirus pandemic has caused oil demand to drop so rapidly that the world is running out of capacity to store barrels. The reasons of the decrease in demand include decline in flights, shipping and other traffic as well as manufacturing production.

Read: Why Coronavirus or COVID19 Can Change The World Order Without A World War III

Here’s how this historic oil crash can actually benefit Pakistan.

1. At current Brent oil rates, Pakistan can procure gas from Qatar at a price even lower than our local gas.

Pakistan can benefit under its agreement with Qatar inked by former Prime Minister Shahid Khaqan Abbasi for buying Liquefied Natural Gas at 13% of the Brent oil price.

2. The cost of electricity produced from gas run power plants will decrease.

3. Lower oil prices would benefit industries including cement, auto and steel and glass as it will lower the tariff.

4. Since the lockdown has caused a reduction in the supply of money, inflation has been slowly but steadily decreasing.

5. The government might be able to provide maximum relief to the general public by selling oil at international price.

6. The lower oil prices would provide an opportunity for the state to make up for huge revenue losses suffered before and after the pandemic.

In what ways do you think Pakistan can benefit from this historic oil crash? Share your views in the comments below!