Fuel Price Drop in Pakistan: Rs. 18/Liter Decrease - Oct. 31 Update

 

Anticipated Drop in Fuel Prices in Pakistan: A Boost for Consumers

In a welcome turn of events, Pakistan is poised to witness a substantial reduction in fuel prices, potentially plummeting by up to Rs. 18 per liter. 

Initial projections indicate that High-Speed Diesel prices may dip by Rs. 5-6 per liter, while MS Petrol could witness a remarkable decline of Rs. 17-18 per liter, all of this slated for October 31.

A Glimpse into the Future Rates

Assuming that global prices remain stable and the Pakistani Rupee sustains its upward momentum in the coming days, local consumers can look forward to a considerable drop in prices. 

We might see petrol rates touching Rs. 297-298, and diesel prices settling at Rs. 265-266 in the upcoming fortnightly price adjustments, set to take effect from October 31, 2023.

Recent Adjustments in Fuel Prices

During the last fortnightly review of petroleum prices, the interim government took a significant step by reducing the price of petrol by Rs. 40 per liter and high-speed diesel by Rs. 15.

Key Drivers of this Positive Outlook

The Pakistani Rupee's impressive 28-day winning streak against the US dollar, coupled with the international rates of HSD and MS experiencing a decline of $1.3-3.5 per barrel last week, are the primary factors fuelling this anticipated decrease. 

If these projections hold true, it would mark the third consecutive decline in fuel rates, following three consecutive hikes.

A Look Back: Recent Price Fluctuations

Recalling the period between August 15 and September 15, we witnessed significant spikes in petrol and high-speed diesel prices, with increments of Rs. 58.43 and Rs. 55.83 per liter, respectively.

This pushed prices to a historic high of Rs. 331-333 per liter at retail until September 30. 

However, following a remarkable recovery of the PKR, rebounding from below 300 to above 278, fuel and diesel rates saw a notable reduction of Rs. 52 and Rs. 26 per liter, respectively, on the 1st and 15th of October.

Noteworthy Market Trends

It's worth highlighting that the PKR has experienced a 1 percent depreciation to 280.5/$ compared to the last fortnightly average of 277/$. 

Meanwhile, the prices of WTI, Brent, and Arablight have seen a decline of approximately 4.3 percent, 3.2 percent, and 4.2 percent, respectively, compared to the previous week.

Transparent Calculation Methodology

The calculations are based on actual costs incurred in the initial 12 days of the current fortnight, with estimates factored in for the remainder of the period. 

This comprehensive approach ensures accuracy and transparency in the assessment of fuel prices.