Pakistan Witnesses Soaring Petroleum Prices, Up by 24% in 2023

Pakistan Witnesses Soaring Petroleum Prices, Up by 24% in 2023

Karachi, January 2, 2024 – Pakistan has experienced a staggering surge in petroleum prices, with an overall increase of up to 24 percent throughout the year 2023.

This substantial hike has left citizens grappling with heightened inflation and economic challenges.

An analysis of petroleum prices reveals that the price of petrol witnessed a significant uptick, soaring by 24.45 percent to reach Rs 267.34 per liter by the end of December 2023. This is in stark contrast to the last recorded price in 2022, which stood at Rs 214.80 per liter. Similarly, the rate of high-speed diesel (HSD) surged by 21.25 percent, reaching Rs 276.21 per liter by December 31, 2023, as opposed to Rs 227.80 per liter on the same date in the preceding year.

Market experts attribute this sharp escalation in petroleum prices to the notable depreciation of the Pakistani Rupee (PKR) against the US dollar during the course of 2023. The local currency experienced a decline of 24.48 percent, reaching PKR 281.86 against the dollar on the last trading day of 2023, compared to PKR 227.80 as of December 30, 2022.

Pakistan announces petroleum prices on a fortnightly basis, taking into consideration changes in exchange rates and international oil prices. The global benchmark, US Brent oil, recorded a decline of 3.05 percent, settling at $76.64 per barrel as of December 29, 2023, in contrast to $79.05 per barrel on January 3, 2022.

The significant surge in petroleum prices has had a profound impact on citizens, leading to a massive spike in inflation during the year 2023. To address the concerns of the public, the government has opted to maintain the current prices of petroleum products until January 15, 2024. This decision aims to alleviate further inflationary pressure on citizens and provides a temporary respite amid economic challenges.

The move to freeze prices temporarily indicates a balancing act by the government, attempting to manage the economic repercussions of increased fuel costs while addressing the needs of the citizens. However, it also underscores the larger challenge of managing a delicate economic situation amidst global uncertainties, volatile exchange rates, and fluctuating oil prices.

As Pakistan grapples with economic challenges, citizens and businesses alike will closely monitor further developments in petroleum prices, looking for signs of stability and sustained efforts to mitigate the impact of rising costs on the overall economy. The government’s decision to maintain current prices offers a brief reprieve, but the long-term economic implications remain a subject of concern for many.