Islamabad, September 15, 2023 – Pakistan is gearing up to unveil its petroleum prices for the second half of September 2023, with the decision slated to be announced on Friday (Today).
This decision comes at a time when the country faces a complex dilemma, primarily driven by the recent surge in global oil prices.
The government’s review of petroleum prices for the second half of September 2023 is scheduled for September 15, 2023, with the new prices set to take effect on September 16, 2023. The forthcoming determination will be influenced by considerations of exchange rates and the prevailing global oil prices.
On the front of exchange rates, the Pakistani Rupee (PKR) has exhibited signs of recovery against the US Dollar. This recovery has been attributed in part to a substantial crackdown on currency smuggling and hoarding. As of September 14, 2023, the PKR closed at PKR 297.96 to the Dollar in the interbank foreign exchange market. This marks a notable recovery of PKR 7.58 compared to its closing rate of PKR 305.54 on August 31, 2023.
However, the principal challenge confronting the authorities is the surge in global oil prices since the commencement of September 2023. The benchmark Brent crude oil price reached $93.74 per barrel during trading on September 14, 2023, as opposed to $87.80 on September 1, 2023.
Pakistan, being a net importer of petroleum products, heavily relies on these imports to meet its domestic energy requirements. Despite the adverse consequences of elevated petroleum costs on local demand, the country imported energy products worth $791 million in July 2023, as compared to $1.44 billion in the same month the previous year. This substantial import dependency places added pressure on the government to align price adjustments with the prevailing global market fluctuations.
In the previous price revision, the government was compelled to make the difficult decision to raise petroleum prices to record-high levels. Petrol reached Rs 305.36 per liter, while High-Speed Diesel (HSD) soared to Rs 313.84 per liter, reaching historic peaks. This sparked concerns among the Pakistani populace about the rising cost of fuel and its potential inflationary impact on the economy.
Balancing these intricate factors and arriving at a decision that adequately addresses both global market trends and the welfare of the local population will pose a significant challenge for the government as it embarks on the task of revising petroleum prices for the upcoming period. The decision is keenly awaited, as it will have far-reaching implications for the country’s economy and the daily lives of its citizens.
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