Initial estimates suggest that the per liter rates for both grades will fall significantly below 300 on October 15 as a result of this week’s global oil prices, the sharp increase in the Pakistani Rupee, and Russia’s decision to lift the ban on pipeline diesel exports.
According to a research by Arif Habib Limited, local gasoline and diesel prices should decrease by Rs. 41/liter and Rs. 19/liter in the upcoming fortnightly pricing starting on 16 October 2023, assuming that international prices and the Pakistani Rupee stay at the same level for the following 10 days.
In a brief market overview published on Friday, Arif Habib Limited stated that concerns about global demand, a stronger US dollar, inflationary pressure, and rising supplies all contributed to the week’s sharp decrease in oil prices. When compared to the previous two weeks’ average prices, WTI, Brent, and Arablight all decreased by 9–11%.
Compared to the previous fortnightly average of $99.3/bbl, the international gasoline (MS) fell by 15% to $84.3/bbl. In a same vein, HSD prices abroad decreased by 10% to $110.6/bbl from the previous fortnightly average of $122.3/bbl.
In contrast to the previous two weeks’ average of 291.65/$, the PKR has risen 2.7 percent to 283.87/$.
Notably, since the last revision of fuel prices, the international MS and HSD rates have fallen by $12 and $9 per barrel, respectively, while the rupee has managed to strengthen by 3% versus the US dollar. In order for the anticipated drop in fuel prices to really occur, this trend must persist through the following fortnightly review of petroleum rates on October 15.
Remember that the last two fortnightly prices of MS and HSD were adjusted for exchange rates at Rs. 11.9/liter and Rs. -2.8/liter, respectively. The MS and HSD are anticipated to decrease by Rs. 28.6/liter and Rs. 19.3/liter in the upcoming monthly pricing, even assuming the same currency adjustment for MS and zero on HSD.
With the factors above taken into account, AHL predicts that the CPI for October will decrease by 92 basis points to 27.5 percent.