By Pakistan is preparing for a potential hike in petrol and diesel prices starting from the second half of October 2024. This expected increase follows a recent surge in global oil prices, driven largely by ongoing unrest in the Middle East.
According to reports, petrol prices may rise by approximately Rs5.5 to Rs6 per liter, while diesel prices could see a larger increase, with an anticipated hike of Rs12 to Rs13 per liter. Currently, the price of petrol stands at Rs247.03 per liter, and diesel is priced at Rs246.29 per liter. If these adjustments come into effect, petrol prices may reach around Rs253 per liter, while diesel prices could climb to approximately Rs260 per liter.
Global Oil Price Surge
The global oil market has seen a sharp uptick in prices, with a 7% rise bringing crude oil to about US$81 per barrel. Although this is a significant increase, it is important to note that crude prices remain about 10% lower than they were a year ago. The ongoing geopolitical tensions in the Middle East have fueled concerns about supply disruptions, pushing up oil prices and prompting the expected adjustments in Pakistan.
Impact on the Public and Economy
As the Pakistani government prepares to review fuel prices in response to the rising global oil market, the public is closely monitoring the situation. The increase in fuel costs could have widespread economic implications, affecting transportation, logistics, and consumer goods prices, which could in turn place more strain on households and businesses already dealing with inflationary pressures.
Exchange Rate Stability
While oil prices are fluctuating, the Pakistani rupee has shown relative stability, with the exchange rate hovering between 277 and 278 against the US dollar. This stability in the rupee, along with steady import premiums for fuel at $8.7 per barrel for petrol and $5 per barrel for diesel, offers a glimmer of hope that further drastic price increases may be avoided.
Outlook for October 2024
The government’s final decision on fuel prices is expected soon, and while many are hopeful for more favorable news, the global oil price surge suggests that a price increase is highly likely. As Pakistan braces for the potential hike in petrol and diesel prices, businesses and consumers alike will need to adjust to the changing cost landscape.
