Pakistan motorists will be hit by another fuel price rise this weekend, after a recent 55-rupee increase in petrol on March 6. That increase was occasioned by increased world crude prices as tension escalated in the Middle East.
Following such an adjustment, petrol was sold at 321.17 rupees a litre and diesel at 335.86 rupees a litre, the highest increase in a long time. As international prices continue to rise, consumers should expect a new round of rises.
Weekly Fuel Prices Updates were introduced.
The oil change occurred when Petroleum Minister Ali Pervaiz Malik announced that the fuel prices in Pakistan would be adjusted on a weekly basis instead of every 15 days.
The main characteristics of the new system:
- Pricing shall be based on a five-day average of international benchmarks, Monday to Friday.
- The estimates involved the Gulf Arab Platts assessment.
- The premium of Pakistan State Oil (PSO) cargoes is weighted.
- This will enable quicker adjustment of international market dynamics in home prices.
- Announcement of petrol and diesel rates will be more timely for consumers.
There is another Increase Likely This Weekend
Crude rates globally are not slowing down, and analysts predict another adjustment by Saturday evening or Sunday.
Current market situation:
- International crude ranged at an average of $77-83 per barrel, which caused the 55-rupee increase.
- Prices have risen even higher, with an average price of $95-97 per barrel.
- Recent trading has seen oil hit over 101 per barrel despite the emergency reserves.
- Strait of Hormuz exports have dropped to less than 10% of pre-conflict levels.
- Hostilities are on the rise, undermining world oil supply chains.
The decrease in fuel costs is improbable; it would need deep government subsidies, which are seriously limited by current IMF policies.
OGRA Rejects Rs. 73 increase speculation
In a climate of increasing discussion of social media, OGRA demystified gossip.
Critical statements made by OGRA:
- No proposal to raise petrol prices by 73.40 rupees per litre has been submitted to the office of the Prime Minister.
- There is no diesel increase proposal of 84.95 rupees per litre.
- These rumors are not only false but totally unfounded.
- They should only trust official announcements released by OGRA or the Petroleum Ministry.
- Publicity of any unverified information will only bring unwarranted panic to the consumers.
Expected Price Impact
According to the current international trends, market analysts provide scenarios of possible future news on the fuel price.
Estimate Expected Increase (Per Litre)
| Conservative Estimate | 15-20 rupees |
| Most Likely Estimate | 20–30 rupees |
| Aggressive Estimate | 30–35 rupees |
These projections consider:
- More government levies and taxes.
- Calculations of Inland Freight Equalization Margin (IFEM).
- The five-day Platts average in Pakistan rupees.
- Premium for the weights of PSO cargoes.
- Recent fluctuations in the exchange rate.
The real improvement will be verified after the final review is done.
Conclusion
A second fuel price increase seems imminent this weekend, with the global crude hovering around $95-97 per barrel, given the current tension in the Middle East. Pakistani consumers should expect a range of 15-35 rupees per litre.
The government is changing to weekly price reviews, which implies quicker adjustment to global changes, but also higher-frequency adjustments. Although OGRA has disapproved rumors of a catastrophic 73-rupee increase, the price of fuel is heading the other way.
In the meantime, drivers are advised to keep a keen eye on the official announcement that will occur this weekend and also budget their monthly funds.
Frequently Asked Questions
According to market analysts, the increase will be between Rs 15 and 35 per litre. Likely the most likely is between Rs20 and Rs30 per litre. The end value will be based on the international crude prices and the new weekly pricing system.
To ensure it can respond more quickly to developments in the global oil market, the government now analyses prices weekly. Our prices are based on an average of the five days upon international benchmarks, a superior indicator of true import prices.
No, because OGRA has formally declared the rumors to be false. The Prime Minister received no letter proposing such an enormous increase.
The new prices will be published this weekend, either on Saturday night or on Sunday, as the committee considers the data from five days of Platts average and PSO prices.
Yes. Officials have ensured that there are adequate stocks. Already, two oil ships have arrived in Karachi under naval escort, and distribution is controlled to stop panic buying and hoarding.
