Consumers in Pakistan could soon experience a substantial relief in fuel prices, with Arif Habib Limited (AHL) forecasting a notable decrease of Rs41 per litre for petrol and Rs19 per litre for diesel on October 16. AHL’s prediction also includes a 92 basis points drop in inflation rates, reaching 27.5%. This anticipated relief is attributed to fluctuations in commodity prices and global currency markets.
AHL pointed to the recent significant decline in international oil prices due to uncertainties in demand, a stronger US dollar, inflationary pressures, and increased supplies over the past week. The Ministry of Finance’s previous fortnightly announcement already provided some relief by reducing petrol prices by Rs8, the first such reduction in two and a half months. Diesel prices also saw a cut of Rs11, setting the new rate at Rs318.18 per litre.
According to AHL’s forecast, international prices of West Texas Intermediate (WTI) oil, Brent, and Arablight have dropped by 9% to 11% compared to the last fortnightly average prices. The report also noted a 15% decrease in international gasoline (MS) prices to USD 84.3/bbl and a 10% dip in high-speed diesel (HSD) prices to USD 110.6/bbl.
The appreciation of the Pakistani rupee against the US dollar, a 2.7% increase to 283.87/USD, is expected to contribute to the anticipated fall in fuel prices. AHL’s projection incorporates these factors, assuming stable international prices and currency levels for the next 10 days. If these conditions hold, local petrol and diesel prices are expected to decrease by Rs41 and Rs19 per litre in the upcoming fortnightly pricing. The report also considered the exchange rate adjustment in the last fortnightly prices, with Motor Spirit (MS) and high-speed diesel (HSD) experiencing adjustments of Rs11.9 and Rs-2.8 per litre, respectively. Even with the assumption of the same currency adjustment for MS and none for HSD in the upcoming prices, a significant drop of Rs28.6 per litre for MS and Rs19.3 per litre for HSD is expected.
