A brokerage firm on Friday forecast that it was expecting a “big relief” in petroleum prices in the country with the decline in petrol and diesel expected to be Rs41 and Rs19 per litre, respectively, on Oct 16.
Arif Habib Limited (AHL) also mentioned a 92bps to 27.5% decrease in inflation rates owing to the price fluctuations in commodities and currency in Pakistan and around the world.
“International oil prices have declined significantly during the last one week amid demand concerns, stronger US dollar, inflationary pressure, and increasing supplies,” the corporation said in its forecast.
In its last fortnightly announcement of fuel prices, the Finance Ministry provided some relief to the country’s inflation-weary masses and dropped the price of petrol for the next fortnight by Rs8, the first time in two-and-a-half-months.
A cut of Rs11 was announced in the diesel price, after which the new rate of the fuel was estimated at Rs318.18 per litre.
Meanwhile in its forecast, the AHL cited the prices of West Texas Intermediate (WTI) oil, Brent, and Arablight which have dropped by 9% to 11% as compared to the last fortnightly average prices.
“The international gasoline (MS) plummeted by 15% to USD 84.3/bbl compared with the last fortnightly average of USD 99.3/bbl. Similarly, the international prices of HSD took a dip of 10% to USD 110.6/bbl compared with the last fortnightly average of USD 122.3/bbl,” it added.
The corporation has mentioned the appreciation of Pakistani rupee against the US dollar, which is expected to contribute to the fall in fuel prices.
“PKR has appreciated 2.7% to 283.87/USD compared to the last fortnightly average of 291.65/USD,” AHL’s forecast read.
It added that incorporating the above-mentioned prices alongside Pakistani rupee appreciation and assuming the international prices and currency remain at the same level for the next 10 days, the local petrol and diesel prices are expected to go down by Rs41 and Rs19 per litre in the next fortnightly prices.
The AHL mentioned that the exchange rate adjustment in the last fortnightly prices of Motor Spirit (MS) and high-speed diesel (HSD) was Rs11.9 and Rs-2.8 per litre, respectively.
“Even assuming the same currency adjustment for MS and nil on HSD in the upcoming fortnightly prices, the MS and HSD are expected to drop by Rs28.6 and Rs19.3 per litre,” the company added.