Rupee fall adds Rs35-40 to local fuel prices since March

KARACHI: The sharp appreciation of dollar against rupee has added around Rs35-40 in the prices of local petroleum products in the last three and half months, industry officials said on Saturday.

The prices of petroleum products rose sharply in the recent weeks and the government passed on the full impact of the high global prices to the consumers after reversing the subsidies on petroleum prices.

According to officials in the oil industry, the sharp hike in the domestic prices of petroleum prices is mainly on the account of rising global oil markets; however, the rupee devaluation against dollar also added to the domestic consumer prices.

"The appreciation of dollar by one rupee adds one to one and a half rupee in the price of the local petroleum prices," an official said.

The dollar started its upward streak against the rupee in March this year when the country plunged into political turmoil, while suspension of the IMF

loan prgramme, owing to a breach of agreed terms by Pakistan worsened the rupee-dollar parity situation further.

Dollar was trading around Rs170 in the beginning of March this year. From there it started moving up against the rupee and is now trading around Rs209 in the interbank by gaining almost Rs40 in the last three and half months.

This added significantly to the landed cost of petroleum products in the country.

The official said the full impact of the global prices had been passed on to the local consumers which also contributed to the rupee depreciation.

“If the rupee loses further against the dollar, say another around Rs10 in the next two weeks, the landed cost of petroleum prices will further increase by the end of this month when the next fortnightly review of the petroleum prices is calculated.”

Pakistan is highly dependent on imported petroleum products and its import bill of crude and petroleum products have gone up to the highest level in the country’s history.

In the first eleven months of this fiscal, the imports of petroleum group doubled compared to the same months of last fiscal.

The imports of petroleum products increased to $10.022 billion in July-May of this fiscal year against $4.431 billion in the same months of the last year, registering a growth of 126 percent.

The import of crude oil also massively jumped by 74 percent to $ $4.759 billion in July-May of this fiscal against $2.724 billion in the same period of last year.