Pakistan Likely Up Petrol Prices and Lower Diesel Rates for Second Half of November 2023

Pakistan Likely Up Petrol Prices and Lower Diesel Rates for Second Half of November 2023

Karachi, November 14, 2023 – As Pakistan gears up for its fortnightly review of fuel prices scheduled on November 15, 2023, speculations arise that the government may increase petrol prices while reducing those of High Speed Diesel (HSD) for the latter half of November 2023.

The anticipated adjustments, to be effective from November 16, are based on industry estimates and the ongoing negotiations with the International Monetary Fund (IMF).

Industry sources suggest that petrol prices could see a marginal increase of approximately 1 percent in the upcoming review, while diesel and other petroleum products may experience a notable reduction. According to estimates submitted by the oil industry to the government, the price of diesel is expected to decrease by over Rs8 per litre in the upcoming review.

The projected ex-depot price for petrol is likely to rise by Rs3.18, reaching Rs286.56 per litre compared to the existing Rs283.38 per litre. On the other hand, the ex-depot price of High Speed Diesel (HSD) is expected to witness a substantial decrease of Rs8.30 per litre, settling at Rs294.88 per litre against the current Rs303.18 per litre.

Similarly, Kerosene prices may see a decline of Rs5.61 per litre, reaching Rs205.42 per litre from the current Rs211.03 per litre. Light Speed Diesel (LDO) might experience a reduction of Rs8.33 at the ex-depot level, bringing the price down to Rs181.13 per litre compared to the existing Rs189.46 per litre.

Oil industry insiders emphasize that the final decision regarding fuel prices rests with the government, which is expected to make the call in the forthcoming review. While some industry experts speculate that the government might maintain the status quo on petrol prices, a reduction in the price of HSD is considered a possibility. However, the ongoing negotiations with the IMF for a Structural Adjustment Programme (SAP) and the need for additional revenue mobilization could influence the government’s decision to keep prices stable in the upcoming review.

Despite a decline in global crude oil prices, the appreciation of the dollar against the Pakistani Rupee has offset potential consumer benefits. Industry experts note that the currency’s recent appreciation, with the dollar settling at Rs287.55 on Monday, has nullified the gains from the reduction in global oil prices. This contrasts with the potential substantial benefits consumers could have enjoyed from decreased fuel prices if not for the currency’s recent strength.

As the nation awaits the November 15 review, the government faces a delicate balancing act, considering both global market dynamics and domestic economic imperatives in determining the direction of fuel prices for the latter half of November 2023.