Expected Decline in Petroleum Prices as Rupee Strengthens

Web DeskSeptember 24, 2023
Expected Decline in Petroleum Prices as Rupee Strengthens

Petroleum prices are expected to decrease, providing relief to consumers, as the Pakistani rupee continues to strengthen against the US dollar. Interim Information Minister Murtaza Solangi made this announcement during a press conference at the Karachi Press Club. Solangi attributed the impending reduction in fuel prices to the recent appreciation of the Pakistani rupee, which has gained between Rs. 30 and Rs. 35 against the US dollar. This strengthening of the rupee is a result of a government crackdown on black market dealers and smugglers.

The crackdown, backed by the military, targeted hoarders, currency smugglers, and black market dealers following a significant depreciation of the rupee. The rupee had fallen to a historic low of Rs. 308 in the interbank market and had exceeded Rs. 330 in the open market earlier in the month. However, it has since rebounded to 291.76 per dollar in the interbank market, appreciating by Rs. 15. This rebound is attributed to increased dollar inflows from exporters, remittances, and efforts by the central bank to promote legal foreign exchange transactions.

Also Read: Ministry Directs OGRA to Maintain Full Petrol Pump Stocks

Minister Solangi emphasized that while the interim government doesn’t control fuel prices, the reduction in oil prices is a result of the strengthening rupee and will bring relief to the people. In the previous fuel price revision on September 16, petrol and diesel prices reached historic highs. Currently, petrol is priced at Rs. 331.1 per liter, while high-speed diesel is available at Rs. 329.19 per liter.

Malik Bostan, Chairman of the Exchange Companies Association of Pakistan (ECAP), expressed optimism that the government’s crackdown on currency-related malpractices would further strengthen the rupee, potentially bringing it below Rs. 250 per dollar. Bostan also revealed that the crackdown had exposed illicit collaborations between black market operators and banking personnel, leading to illegal dollar trading through hawala/hundi channels.

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