In Pakistan, there’s growing concern that petrol and diesel prices could be on the brink of a significant increase, and it’s all linked to the country’s currency, the rupee, losing its value compared to the US dollar. Within the next two weeks, we might see the price of petrol surge by more than Rs13 per liter, and this could happen as early as August 31.
The reason behind this looming price hike is the notable rise in the value of the US dollar. From August 16 to August 24 alone, the dollar’s value increased by Rs12.08. So, when the dollar gets stronger against the rupee, it often translates to higher prices for petrol and diesel. Even though global oil and crude oil prices haven’t seen significant changes, the stronger dollar can still push up costs.
All of this might lead to even more expensive petrol and diesel come September, with the possibility of prices skyrocketing. In the past fortnight, we’ve already witnessed petrol prices climbing by Rs37.50 per liter, and diesel becoming Rs40 dearer. Now, with the dollar’s value surpassing Rs300 and hitting Rs314 in the open market, there’s a growing worry that the prices of crude oil and oil products purchased in US dollars could send petrol and diesel prices soaring in the first half of September. It’s a situation that could potentially result in double-digit price hikes.
Adding to the mix, the charges for confirming LCs (letters of credit) have also surged by 10%, a significant increase from the 0.5-1% range seen a few years ago. This factor further compounds the economic challenges Pakistan is currently facing, especially in relation to fuel prices.
