Petroleum prices are expected to see a decline in the next announcement amid a significant decline in international oil prices and appreciation of the Pakistani rupee against US dollar, according to a brokerage house.
“The local petrol and diesel prices are expected to go down by Rs41 per litre and Rs19 per litre, respectively, in the next fortnightly prices effective from 16-Oct-2023,” said Arif Habib Limited (AHL) in a note on Friday.
AHL attributed its projection to a number of developments.
It said international oil prices have declined significantly during the last one week amid demand concerns, stronger USD, inflationary pressure, and increasing supplies.
“The prices of WTI, Brent, and Arab Light dropped by ~9%-11% as compared to the last fortnightly average prices.
“International gasoline (MS) plummeted by 15% to $84.3/bbl compared with the last fortnightly average of $99.3/bbl. Similarly, the international prices of High-Speed Diesel (HSD) took a dip of 10% to $110.6/bbl compared with the last fortnightly average of $122.3/bbl,” said AHL.
In addition to a decline in international oil rates, the Pakistani rupee has appreciated 2.7% to 283.87 against the US dollar compared to the last fortnightly average of 291.65 against the US dollar.
“Incorporating the above-mentioned prices alongside Pakistani rupee appreciation and assuming the international prices and currency remain at the same level for next 10 days, the local petrol and diesel prices are expected to go down by Rs41 per litre and Rs19 per litre in the next fortnightly prices effective from 16-Oct-2023,” it said.
The brokerage house shared that the exchange rate adjustment in the last fortnightly prices of MS and HSD was Rs11.9 per litre and a negative Rs2.8 per litre, respectively.
“Even assuming the same currency adjustment for MS and nil on HSD in the upcoming fortnightly prices, the MS and HSD are expected to drop by Rs28.6 per litre and Rs19.3 per litre,” said AHL.
On the inflation front, AHL lowered its estimates for October CPI inflation to 27.5%.
Last week, the caretaker government announced a reduction of Rs8 per litre in the price of MS and Rs11 per litre in that of HSD.
The new price for petrol and diesel became 323.38 and 318.18 per litre, respectively, with effect from October 1.
Comments
Comments are closed.