Anticipated Surge in Petroleum Product Prices Amid Currency Devaluation and Increasing International Oil Prices

Anticipated Surge in Petroleum Product Prices Amid Currency Devaluation and Increasing International Oil Prices

Impending Rise in Petroleum Prices

In the coming week, petroleum product prices are poised to surge due to the devaluation of currency and escalating international oil prices. According to projections, the price of petrol and high-speed diesel (HSD) could experience a hike by Rs. 10-14 and Rs. 14-16 per liter respectively as of September 15. Additionally, the price of kerosene is also expected to rise by Rs. 10.

Depreciation of Rupee and Increase in Brent Prices

The rupee has seen a significant depreciation, plummeting by Rs. 4.5 against the dollar in the first ten days of the current fortnight. Despite this, international Brent prices escalated above $92 per barrel, compared to $88 in the first week of September, effectively neutralizing any potential gains from the exchange rate.

(Read Also: India Increases Windfall Tax on Petroleum Crude: Implications for Petroleum and Aviation Industries)

Passing on the Increase to Consumers

The government also intends to relay an increase in selling margins for authorized petroleum dealers and marketing corporations to the consumers. This increase, greenlit by the cabinet’s Economic Coordination Committee (ECC) last week, amounts to 88 paisas per liter.

Rise in Import Parity Price

Since September 1, the import parity price for petrol, diesel, and kerosene has escalated by Rs. 13, Rs. 14, and Rs. 10 per liter respectively. Consequently, the sale prices of these petroleum products are projected to rise by Rs. 13, Rs. 16, and over Rs. 10 per liter respectively, according to data from Pakistan State Oil (PSO). Jet fuel prices are also anticipated to surge by Rs. 10 per liter.

(Read Also: The Impact of Fuel Price Increases on Vehicle Owners)

Projected Prices and Impact on Inflation

Due to these changes, petrol and diesel prices are expected to exceed Rs. 320 and Rs. 325 per liter respectively, with the price of kerosene projected to surpass Rs. 240 per liter. These price hikes are foreseen to trigger greater inflation in numerous industries across Pakistan.