KARACHI – Get ready for another hit to your wallet as petrol and diesel prices in Pakistan are likely to see a significant increase in the upcoming fortnightly review. This news comes amidst a surge in global oil prices, as reported on Thursday.
However, industry experts suggest that the recent decline in the value of the Pakistani rupee against the US dollar in the interbank market may somewhat mitigate the impending price hike.
The Oil and Gas Regulatory Authority (Ogra) is set to unveil new prices for petrol, diesel, and other petroleum products on September 15, based on the average international crude oil prices and exchange rate fluctuations in the first 15 days of September.
If estimates hold true, the price of petrol could surge by Rs16 per liter during the next fortnightly review, while the price of high-speed diesel (HSD) may climb by Rs13.66 per liter.
For context, the ex-depot price of petrol has been calculated at Rs321.35 per liter for the forthcoming fortnight, compared to its current price of Rs305.36 per liter, indicating a hike of Rs15.99. Meanwhile, the ex-depot price of HSD is expected to reach Rs325.50 per liter, up from its existing price of Rs311.84 per liter, marking an increase of Rs13.66 per liter.
Consumers can also anticipate the prices of kerosene and light diesel oil (LDO) to rise by Rs10.02 and Rs4.45 per liter, respectively.
The surge in ex-depot prices can be largely attributed to the rupee’s depreciation against the US dollar and the uptick in international petroleum product prices.
The oil industry has calculated the ex-depot price of petroleum products for the next fortnight at an average exchange rate of Rs304.21 per US dollar, compared to the Rs299.77 per US dollar exchange rate used for the current prices in the country.
Industry insiders are hopeful that there might be some reduction in the exchange rate, given the recent decline of the US dollar in the interbank market. However, they caution that the global rise in petroleum product prices will likely overshadow any local relief, resulting in higher costs for consumers.
An industry official remarked, “While the rupee’s appreciation will offer some relief, it won’t be sufficient to counterbalance the impact of surging global oil prices.”
The government routinely reviews and adjusts petroleum prices every fortnight based on Ogra’s recommendations. The final decision, however, rests with the finance ministry, which occasionally absorbs a portion of the increase to ease the burden on consumers.
Nonetheless, the government remains committed to raising fuel prices in line with its agreement with the International Monetary Fund (IMF) under a $3 billion standby agreement.