Petrol price set to surge by Rs10, diesel to dip in upcoming review

KARACHI: The price of petrol is poised to rise by nearly Rs10 per litre in the upcoming fortnightly review of petroleum prices, in line with a surge in international crude prices, industry officials said on Friday.

The price of petrol is likely to go up to Rs289.69 per litre in the next review of prices from the existing Rs 279.75 per litre, according to the estimates of the oil industry.

However, the estimates suggest that the price of high-speed diesel (HSD) is expected to go down by Rs1.30 per litre to Rs284.26 per litre from the current price of Rs285.86 per litre.

The price of kerosene may register a slight decline of Rs0.17 per litre to Rs188.49 per litre against the current price of Rs188.66 per litre. Similarly, the price of light diesel oil (LDO) may register a Rs0.45 per litre increase and it is expected to go up to Rs168.63 per litre against the current price of Rs168.18 per litre.

"The local price of petrol will be raised due to a hike in prices in the international market," said an official. "The international price of petrol jumped to $95 per barrel in the last two weeks compared to $90 per barrel in the first fortnight of the month of March."

"The massive change in the petrol price would come because of the rise in the price of petrol in the global market."

On the other hand, the price of HSD would fall because of a decline in its price in the global market. The price of HSD dropped to $98 per barrel in the last weeks compared to $99 per barrel in the first fifteen days of March.

Industry officials said that this decline would be translated into more than a one-rupee decrease in the price for domestic consumers.

They said that the exchange rate has almost remained stabilised during the last four weeks, which would not impact the local prices of petroleum products significantly.

The government reviews fuel prices every 15 days and adjusts them based on the movements of global oil prices and the exchange rate of the local currency. The rupee has appreciated slightly against the dollar since the last price revision, trading at around 277.94 per dollar on Friday.

The final prices will be announced by the government on Sunday night and will take effect from April1. The government will calculate the prices of petroleum products keeping in view monthly tax targets and estimated fuel consumption and supply cost of Pakistan State Oil, the state-owned oil company.

The latest increase in fuel prices will come after the government kept the price of petrol unchanged in the last fortnightly review after taking over the reins of power at the start of this month. It revised the HSD price downward by Rs1.77 per litre.

Crude oil prices have gained about 3.2 percent in the last week of March, as geopolitical tensions in the Middle East and reports of falling inventories boosted the market. Concerns over supply disruptions in the region also added to the worries.

Pakistan, which imports about 85 percent of its oil needs, has been grappling with a balance of payments crisis and soaring inflation, which stood at 23.1 percent on a year-on-year basis in February,

The government has agreed to a series of painful measures, including raising taxes, hiking energy prices and allowing a market-based exchange rate, as part of a $3 billion loan deal with the International Monetary Fund in July last year to navigate a path to economic stability.

The higher fuel prices will have a knock-on effect on the cost of living and transportation in the country, where the sale of petroleum products declined by 19 percent year-on-year in February. The drop was mainly due to lower gasoline and diesel sales, as consumers cut back on their spending amid the economic slowdown. The government is charging Rs60 per litre on petrol and HSD each.