The petroleum prices in Pakistan are expected to decline as the local currency continues to recover against the US dollar, interim Information Minister Murtaza Solangi said on Saturday.
The rupee has gained Rs30 to Rs35 against the greenback in recent days, due to administrative measures taken by the interim government, including a crackdown on hoarders, currency smugglers, and black marketeers.
The currency has gained 5% or Rs15 since then, supported by dollar inflows from exporters and remittances, as well as measures by the central bank to encourage legal channels for foreign exchange transactions.
“There are enough chances that the oil prices will be reduced in the next [fuel prices] announcement,” the minister said, adding that the interim government has no role in fuel prices as they are linked with international oil rates.
“[…] people will get some benefit of reduction in the value of the dollar,” he remarked.
In the last fortnight review on Sept 16, the fuel prices reached a historic high after the caretaker government jacked up the petrol price by more than Rs26 and diesel price by over Rs17 per litre.
Currently, petrol is being sold at Rs331.1 per litre while high-speed diesel is available at Rs329.19 per litre.
Rupee Likely to Recover to 250
Earlier this week, Chairman Exchange Companies Association of Pakistan (ECAP) Malik Bostan expressed hope that the country’s remittances may increase by 10-20% in the backdrop of the government’s crackdown against hoarders, black marketeers, and smugglers of dollars.
He said that foreign exchange companies are now getting $15 million per day, up from $5 million per day before the crackdown. He also said that the crackdown has exposed a nexus between black marketeers and banking staff.
Bostan said that if the crackdown continued, the dollar would come down to below Rs250.
The recovery of the rupee against the dollar is good news for Pakistan, as it will make imports cheaper and help to reduce inflation. It is also expected to boost investment and economic growth.