Major Price Drop Expected for Petrol and Diesel This Week

While the global oil market begins to slow down, the price of both petrol and diesel in Pakistan may drop significantly this week. This should be happening at this time when consumers have been subjected to a high cost of living due to the worsening global economic crisis and local economic pressures.

Petrol and Diesel Prices to Drop by Rs. 12 Per liter

Some leading sources reveal that the federal government may decide to reduce International Motor Spirit (IMS) and High-Speed Diesel (HSD) by a staggering Rs. 12 per liter on September 14, 2024. This development hails recent trends in the global oil market where prices have descended sharply to the benefit of fuel consumers.

This expected reduction in the prices of fuel is mainly credited to the downward trend in crude oil prices which is now trading below $70 per barrel in the current two weeks. The international oil market which in many a time determines the local petrol and diesel prices has registered a decline, thus bringing some relief to oil-importing countries that includes Pakistan.

Stable Exchange Rate Supports Decrease

The fair expected reduction in the price of Paragon Houses’ proposed investment is also catalyzed by the stability in the Pakistani rupee. Throughout the review period, the exchange rate was fixed at approximately Rs. 278 per U. S. dollar. This aspect of currency stability, coupled with the falling international prices of oil, has paved the way for a reduction in local fuel prices.

A stable rupee indicates that the price of imported oil remains constant and the government is able to relay the savings from lower global oil prices to users without further budging from depreciating currency.

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New Prices Expected for Petrol and Diesel

The top market analysts opine that the new prices of fuel will be way cheaper compared to the prevailing market rates. The going rate of High-Speed Diesel (HSD) is expected to come down to between Rs.250– Rs. 251 per liter. On the other hand, there will be a slight reduction of the MS petrol price to around Rs. 247- 248 per liter.

This drop will be of great relief to the motorists and the various industries that rely on fuel. Lower prices of petrol and diesel are beneficial to transport, farming, and industries that use diesel machinery and equipment. Reduced prices on diesel imply that the cost of transportation would reduce thus lowering the prices for goods and services in almost all the sectors of the economy.

Previous Price Adjustments

The anticipated cut of Rs. 12 per liter is much higher than minor changes made in the preceding two weeks. In the last review, instead of decreasing the price of petrol more, the government has cut Rs. 1 only. Have reduced Rs. 86 per liter and are currently selling at Rs. 259 per liter. undefined Similarly, there was a cut of Rs. 3 in the price of diesel as well At the same time, the price of diesel was reduced by Rs. 3. 32 per liter, which was reduced to Rs. 262 per liter. undefined

Although these cuts were considered positive, they did not affect a very large amount compared to the expected cut this week, which might be enough to give consumers a better deal.

Global Oil Trends: A Key Factor in Price Movements

The movement in the international petrol and diesel prices influences the fuel prices in Pakistan as well as, the neighboring countries. It is important to regard that as the global economy is already on a path to recovery after the effects of the pandemic, conflicts, and interruptions of the supply chains, the price of crude oil has remained rather volatile.

However, the existing average oil price below $70 per barrel is an indication of a slowdown in demand as well as the enhancement of the global supply condition. Although this is beneficial to oil-importing countries, it is still uncertain how long this trend will last.

Impact on Pakistan’s Economy

As they arrive with considerable impacts on the other petrol and diesel prices in the overall economy. Each time there is a hike in fuel prices, transport becomes costly and this is usually reflected in other basic commodities in the market more so those that require frequent transport like food products. On the other hand, when fuel prices are reduced this is likely to affect the economy, and other prices for goods and services are reduced as well.

Conclusion: A Welcomed Change for Consumers

This is equally true as high petrol and diesel prices have been a major pinch to the consumer and burden to businesses. With the declining International oil price and with the rupee remaining highly stable, Pakistan is in a position to pass on this saving to the public.

On the one hand, it is great news that fuel prices have decreased. On the other hand, I have a question as to how long it will actually last. Since the petrol and diesel prices are volatile in the international market any future hikes can again affect the local prices. Nonetheless, the expected Rs. 12 per liter cut is something that the masses are looking forward to and supplies some consolation to a population that is still struggling economically.