Islamabad, September 30, 2023 – Pakistan is poised to unveil petroleum prices today for the first half of October 2023, with the decision set to take effect from October 1, 2023.
This announcement comes as the country conducts its fortnightly review of fuel prices, closely monitored by consumers and businesses alike.
As the review gets underway, many analysts are anticipating a potential reduction in petroleum prices for the first half of October 2023. The key factor behind this expectation is the recent strengthening of the Pakistani Rupee (PKR) against the US dollar.
The exchange rate plays a significant role in determining petroleum prices in Pakistan, as the country heavily relies on imported petroleum products to meet its domestic demand. Recent developments in the exchange rate have been favorable for a potential price reduction.
On September 28, the PKR closed at PKR 287.84 to the US dollar in the interbank market, compared to PKR 296.85 on September 15. This notable appreciation of the PKR suggests increased purchasing power, which can have a positive impact on the pricing of imported commodities like petroleum.
However, there is a contrasting factor at play that may discourage the government from providing relief to the masses. International oil prices have surged in recent days, adding pressure to the decision-making process.
The benchmark US Brent crude oil price, a key reference point for global oil markets, recorded an increase of 1.06 percent to $95.31 per barrel as of September 29, up from $94.24 on September 15. These upward trends in global oil prices can offset some of the potential benefits of a stronger PKR.
In the previous fuel price adjustment, the caretaker government had announced a third consecutive increase in petroleum prices. On September 15, 2023, the Ministry of Finance revealed that the price of petrol had risen by Rs 26.02, reaching Rs 331.38 per liter, up from its previous rate of Rs 305.36. Diesel also witnessed a significant increase, with its price rising by Rs 17.34 to reach Rs 329.18 per liter from Rs 311.84.
One of the contributing factors to the current situation is the substantial decline in the import of petroleum products in the early months of the fiscal year 2023-24. According to data from the Pakistan Bureau of Statistics (PBS), petroleum product imports decreased by 41 percent during the first two months of the fiscal year compared to the same period in the previous year.
From July to August in fiscal year 2023-24, the import of petroleum products amounted to $971 million, down from $1.66 billion during the corresponding period of the previous fiscal year. This decline in imports is likely due to higher global prices, resulting in a reduced imported quantity of petroleum products.
With these complex factors in play, the decision on petroleum prices for the first half of October 2023 is awaited with keen interest as it will have a direct impact on the cost of living and business operations in Pakistan. Consumers and businesses are advised to stay updated with the official announcement and prepare for any potential changes in fuel prices.