Pakistanis are bracing for a substantial reduction in fuel prices this week, offering a glimmer of relief for a populace grappling with inflation. The government’s fortnightly review is to yield a noteworthy adjustment, following its previous cuts effective from May 1.
In recent months, plummeting oil prices on the global stage have paved the way for domestic reductions, with petrol witnessing a decline of Rs5.45 and diesel dropping by Rs8.42 per liter earlier.
The current international oil market scenario sees a $7.26 per barrel reduction for petrol, translating to an anticipated Rs12.84 per liter dip locally. Similarly, diesel prices poised to decrease by Rs8.30 per liter, mirroring a global decline of $4.68 per barrel.
Notably, global petrol and diesel prices stand at $98.99 and $99.37 per barrel, respectively, underscoring the impact of international dynamics on local fuel rates.
This move aligns with a broader economic trend, as Pakistan’s consumer price index (CPI) has shown consistent decline over the past four months, reaching 17.6 percent in April, the lowest since May 2022. Such trends seen as a boon for the coalition government, particularly under the leadership of Prime Minister Shehbaz Sharif.
Historically, declining oil prices have played a pivotal role in curbing inflation. During the tenure of former premier Nawaz Sharif, oil price drops exceeding 100 percent globally significantly contributed to easing inflationary pressures.
While the current reduction may not match past magnitudes, factors like a weaker rupee compared to earlier years may moderate the overall impact. The Pakistan Muslim League-Nawaz (PML-N) stands to benefit from these economic shifts, especially amid ongoing negotiations with the International Monetary Fund (IMF) for a substantial bailout package.
The provincial government in Punjab, led by PML-N’s Chief Minister Maryam Nawaz, has also demonstrated effective price control measures, particularly in food essentials like wheat flour. Initiatives such as reducing roti prices reflect a concerted effort to mitigate economic burdens on citizens.
As talks with the IMF commence, the anticipated drop in fuel prices coupled with controlled inflation trends augur well for Pakistan’s economic stability, offering a ray of hope for its citizens amid challenging times.
