Expected decrease in Petrol prices of Rs. 10 per liter.
There are indications that fuel prices in Pakistan may decrease significantly, potentially providing relief to drivers across the country. The anticipated reduction, estimated at up to Rs.10 per liter, could be a pleasant surprise for consumers.
The projected HSD and MS petrol rates will be in focus on November 15.
Based on preliminary calculations, High-Speed Diesel (HSD) is expected to decrease by Rs. 10 per liter, while Motor Spirit (MS Petrol) may see a decrease of Rs. 8 per liter, effective from November 15. If international oil prices continue to decline, local consumers may observe petrol and diesel prices reaching Rs. 275.38 and Rs. 293.18, respectively, in the upcoming biweekly price adjustments starting from November 15, 2023.
Examining the relationship between exchange rates and global fuel trends.
The recent depreciation of the Pakistani Rupee may offset the potential benefits of the global dip in fuel rates. Since October 15, the local currency has experienced a significant drop of Rs. 10.2 against the US dollar, adding an element of uncertainty to the overall impact on domestic fuel prices.
Market Dynamics: Fluctuations in HSD and Petrol Prices.
It is important to note that there was a decrease in the price of High-Speed Diesel by approximately $8-9 per barrel, reaching $104 during the week in review. Petrol also experienced a smaller decline, decreasing by $1 to $90.
A summary: Recent changes in prices and the subsequent recovery.
Between August 15 and September 15, there was a significant increase in petrol and high-speed diesel prices in Pakistan. The prices reached a historic high of Rs. 331-333 per liter at retail until September 30. However, on October 1 and 15, there was a considerable decrease in fuel and diesel rates due to the recovery of the Pakistani Rupee.
The review process came to a halt on October 31, resulting in a decision and unfulfilled expectations.
The prices of petrol and High-Speed Diesel remained the same at Rs. 283.38 per liter and Rs. 303.18 per liter in October. The interim government chose to keep fuel prices unchanged, despite expectations of a potential relief of up to Rs. 18 per liter. During this period, the Pakistani Rupee depreciated by 3.5 percent to 287/$ compared to an average of 277/$ on October 16. International benchmarks like WTI, Brent, and Arablight saw drops of around 9.6 percent, 10.6 percent, and 9.6 percent, respectively.
The relationship between international oil prices and local economic factors is a key determinant of fuel costs in Pakistan. Consumers are eagerly anticipating the November 15 price adjustments, as the interplay of global and domestic variables adds uncertainty to the fuel market.