Fuel prices may finally come down after two months

The reduction has been estimated on the basis of rupee appreciation and the relative stability that the world oil prices enjoyed in the past week.

The Pakistani rupee has appreciated over 6% against the US dollar in the past 16 trading sessions with the greenback declining from Rs307 to Rs288.

When the government last notified oil prices on September 16, benchmark Brent crude oil was trading at above $95 per barrel. It dropped to $93.69 since then and now remains stable below $94.50.

Ogra’s computations show that the regulatory authority used an average exchange rate of Rs302.32 per US dollar when it calculated oil prices on September 15. The average exchange rate has now dropped to Rs291.

Sources in Ogra say that the petrol price could be slashed by Rs10 on the account of rupee appreciation alone. If the authorities take into account the oil price trend, the price could come down by as much as Rs19 per litre.

The government increased the petrol price by a massive Rs26 per litre on September 16 after the value of the US dollar rapidly increased in the first week of September.

A nationwide crackdown against the hoarding and smuggling of American currency reversed the trend and the Pakistani rupee strengthened against the greenback.

Similarly, the price of high-speed diesel (HSD) could be decreased by up to Rs12.

However, there is a remote possibility of the government reintroducing the general sales tax on petroleum products. The GST was rated zero in March 2022 by the then prime minister, Imran Khan, and the PDM government did not reimpose it in a bid not to hurt public sentiments.