There is a possibility of a significant reduction in fuel prices in Pakistan, with estimates indicating that the cost per liter of High-Speed Diesel may drop by around Rs. 5-6, and the price of MS Petrol could decrease by about Rs. 17-18 per liter on October 31.
This anticipated decrease is contingent on international fuel prices remaining stable and the Pakistani Rupee maintaining its recent strength over the next few days.
Assuming these conditions hold, it is expected that local petrol and diesel prices will be reduced to approximately Rs. 297-298 and Rs. 265-266 per liter, respectively, in the fortnightly pricing adjustments effective from October 31, 2023. The recent price adjustments by the interim government, which saw a reduction of Rs. 40 per liter for petrol and Rs. 15 per liter for high-speed diesel, have contributed to this potential decrease.
The strengthening of the Pakistani Rupee against the US dollar for 28 consecutive days and a decline in international prices of High-Speed Diesel (HSD) and MS Petrol by $1.3-3.5 per barrel in the previous week are the primary factors driving this expected reduction. If these expectations materialize, it would mark the third consecutive decrease in fuel prices after three successive increases.
To provide context, between August 15 and September 15, petrol and high-speed diesel prices surged by Rs. 58.43 and Rs. 55.83 per liter, respectively, reaching a historic high of Rs. 331-333 per liter by the end of September. However, due to the significant recovery of the Pakistani Rupee, which climbed from below 300 to above 278, fuel and diesel prices were subsequently reduced by Rs. 52 and Rs. 26 per liter on the 1st and 15th of October.
It’s worth noting that the Pakistani Rupee has depreciated by 1 percent, reaching 280.5 against the US dollar, compared to the last fortnightly average of 277/$. Additionally, the prices of WTI, Brent, and Arablight crude oils have decreased by approximately 4.3 percent, 3.2 percent, and 4.2 percent, respectively, in comparison to the previous week.
These projections are based on actual costs during the first 12 days of the current fortnight, with estimates for the remainder of the period.
