According to experts, price of petrol in Pakistan should have reduced by Rs 25 per liter in view of the recent decline in oil prices in the international market.
Due to the rupee’s continuous decline against the dollar and the local unit making record lows on a daily basis for the last couple of days, the government will not be able to pass on the benefits of lower prices for petroleum products to consumers.
The local currency had plunged to a new low against the US dollar, which continued to strengthen in the inter bank market for the ninth straight session. As it shed Rs 3.09 or 1.31%, the greenback closed at Rs 236.02 in the inter bank market, up from Rs 232.93 a day earlier. After closing at almost Rs 211 on July 15, 2022, the dollar has gained Rs 25 against the rupee.
As a consequence of the exchange rate depreciation, consumers will not be able to benefit from a reduction in petroleum prices in the coming week.
IMF conditions on petrol and diesel Price
If average price from July 14 to July 26 is calculated, the price of petrol should decline by Rs 25 per liter, with diesel prices possibly also fall. Under IMF conditions, the exchange loss could push up diesel and petrol prices in the coming fortnight along with an increase in the petroleum levy (PL).
Crude oil prices globally hovered around $103 per barrel, whereas petrol prices were around $100 and diesel prices around $120. “With stable exchange rates, local oil prices could be reduce”.
Pakistan State Oil (PSO) will also have to consider the exchange loss on crude and petroleum products imported by the government when determining the final price.
Dollar shortages in the local market have also caused problems as oil import letters of credit are now settling at over $240.