Starting September 1, 2024, petrol prices in Pakistan are anticipated to drop by Rs 5-6 per litre, marking the third consecutive fortnight of reductions. This decrease comes as a welcome relief for consumers, driven by favorable global oil market trends and improvements in the local exchange rate.
Global Oil Price Decline
The reduction in petrol prices is largely attributed to a recent decline in global oil prices. Over the past two weeks, the price of oil has fallen by $2 to $2.30 per barrel. Specifically, the average price of petrol has decreased from $82.50 to $80.40 per barrel, while the price of high-speed diesel (HSD) has dropped from $90.30 to $88 per barrel. Additionally, the import premium on petrol has decreased by 50 cents per barrel, contributing to the expected reduction in local fuel prices.
Exchange Rate Impact
The strengthening of the Pakistani rupee against the US dollar has further contributed to the anticipated drop in petrol prices. The local currency has gained 25 cents against the dollar during the same period, which has positively impacted the cost of petroleum imports.
Current Fuel Prices
As of the latest pricing review on August 14, 2024, the ex-depot price of petrol stands at Rs 260.96 per litre, while HSD is priced at Rs 266.07 per litre. In the previous review, the government reduced petrol prices by Rs 8.47 per litre and HSD by Rs 6.70 per litre. Over the last two fortnights, petrol prices have seen a cumulative reduction of Rs 14.64 per litre, while HSD prices have decreased by Rs 17.56 per litre.
Previous Price Adjustments
The upcoming reduction follows earlier adjustments, including a drop of Rs 6.17 and Rs 10.86 per litre on July 31, 2024. However, it’s important to note that prior to these decreases, petrol and HSD prices saw a significant increase of Rs 17.44 and Rs 15.74 per litre, respectively, in the first fortnight of July. Between May 1 and June 15, 2024, petrol prices were reduced by approximately Rs 35 per litre, while HSD prices were lowered by Rs 22 per litre.
Outlook for September
With global oil prices on a downward trend and the Pakistani rupee showing strength against the dollar, consumers can look forward to further relief at the pump. The expected reduction in petrol prices in September 2024 is a positive development for the economy, providing much-needed respite to households and businesses across the country.
