As we approach February 16, 2024, there are indications that the government of Pakistan is contemplating a hike in the price of high-speed diesel (HSD) by Rs6.3 per litre for the latter part of February. This possible hike coincides with shifts in global oil prices and other economic variables affecting the domestic fuel market.
The ex-refinery rate of HSD, pivotal in determining retail prices, has surged by about Rs8 per liter. This spike pushes the present HSD price to Rs206.57 per liter, marking a significant rise from the earlier Rs198.56 per liter rate two weeks ago.
On the other hand, the ex-refinery cost of petrol has seen a slight increase of Rs0.85 per liter, reaching Rs190.32 per liter. Additionally, there has been a slight strengthening of the local currency against the US dollar since the previous pricing decision. This strengthening, with a weighted average rate of approximately PKR 279.37 per USD, factors into the overall computation of fuel prices in the domestic market.
Taking these factors into account, the expected net change for HSD and petrol, factoring in the exchange rate adjustment, is projected to be an increase of Rs6.3 and Rs0.35 per liter, respectively.
It’s crucial to emphasize that while these adjustments are being considered, the ultimate decision on fuel prices hinges on several factors, including trends in the global oil market and fluctuations in exchange rates. Consequently, the government will determine and disclose the new prices at midnight on February 15, 2024.
These adjustments in fuel prices carry significant implications as they directly affect consumers, businesses, and various sectors of the economy. Furthermore, they underscore the government’s endeavor to manage fuel subsidies and uphold fiscal stability amid external economic challenges.
The government’s decision to revise fuel prices is a component of its continuous endeavor to strike a balance between economic factors and safeguard the sustainability of the energy sector. This includes efforts to minimize the impact on consumers and the wider economy.