Karachi, September 25, 2023 – Pakistan likely to contemplate a reduction in petroleum prices for the first half of October 2023, given the appreciation of the Pakistani Rupee (PKR) and a decline in international oil prices.
The government is scheduled to review petroleum prices on September 30, 2023, with the new rates expected to take effect from October 1, 2023.
The decision to adjust petroleum prices in Pakistan is influenced by two critical factors: the exchange rate and international oil prices. Recent developments in both indicators since September 15, 2023, have been favorable for a potential reduction in the prices of petroleum products.
The PKR has shown notable strength, closing at PKR 291.76 to the US dollar in the interbank market on September 22, compared to PKR 296.85 on September 15.
Simultaneously, the benchmark US Brent crude oil price has decreased to $91.96 per barrel as of September 22, down from $93.04 on September 15.
However, the government’s final decision regarding petroleum prices for October 2023 will depend on the continued movement of these two indicators during the remaining days of September.
In its previous decision, the caretaker government had announced a third consecutive increase in petroleum prices. On September 15, 2023, the Ministry of Finance officially revealed that the price of petrol had surged by Rs 26.02, reaching Rs 331.38 per liter 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.
It’s worth noting that Pakistan heavily relies on imported petroleum products to meet domestic demands. Recent statistics released by the Pakistan Bureau of Statistics (PBS) indicate a substantial decline of 41 percent in the import of petroleum products during the first two months of the fiscal year 2023-24.
From July to August in the fiscal year 2023-24, the import of petroleum products amounted to $971 million, a significant drop from $1.66 billion during the corresponding period of the previous fiscal year. This decrease in imports may be attributed to higher global prices, resulting in a reduced imported quantity of petroleum products, which stood at 1.59 million tons during the first two months of the fiscal year 2023-24, down from 1.91 million tons in the corresponding period of the previous fiscal year.