ISLAMABAD – Good news may be on the horizon for motorists in Pakistan as the Finance Ministry hints at a potential decrease in petrol prices. Officials from the ministry have cited the recent strengthening of the rupee as a key factor contributing to this positive outlook.
Starting from October 1, it is anticipated that the price of a liter of petrol could decrease by a substantial Rs11.98, while high-speed diesel might see a reduction of Rs9.17 per liter. Kerosene prices could also dip by Rs5.58 per liter during the same period.
However, experts caution that this reduction in petrol prices may not provide complete relief to consumers if global oil prices continue their upward trajectory. The fate of petrol prices remains closely tied to both international oil markets and the exchange rate of the rupee.
The government is expected to make its final decision regarding petroleum product prices for the upcoming fortnight on September 30. The recent strength of the rupee against the US dollar is indeed remarkable, having surged by nearly 5% in the past 12 consecutive working days. This surge has taken the rupee to a five-week high at Rs292.78 against the greenback in the interbank market, coming within Rs5 of its pre-caretaker government level.
The rupee’s resurgence can be attributed to increased foreign currency supply in local markets, largely due to efforts to combat smuggling and hoarding of the currency. According to data from the State Bank of Pakistan (SBP), the rupee gained 0.38% or Rs1.10 in a single day, indicating a significant recovery.
In a related development, international oil prices experienced a slight decline on Friday, driven by concerns over a more hawkish stance from the US central bank. These fears have raised concerns about slowing oil demand, offsetting supply concerns arising from Russia’s fuel export ban.
Brent futures dipped by 32 cents, or 0.4%, to settle at $92.95 per barrel by 1625 GMT. Meanwhile, US West Texas Intermediate crude (WTI) futures also fell by 23 cents, or 0.3%, closing at $89.41 a barrel.
For the week, both benchmarks appeared poised for a decline exceeding 1%, marking a stark contrast to the previous three weeks when they surged more than 10% due to worries about supply shortages.
US Federal Reserve officials have issued warnings of potential rate hikes in the future. Such actions could increase borrowing costs, potentially slowing economic growth and, in turn, reducing oil demand.
As October 1 approaches, all eyes will be on the global oil markets and the exchange rate of the rupee, with consumers hoping for a substantial reduction in petrol prices, providing some much-needed relief in these challenging times.