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Govt likely to maintain status quo on petrol, diesel prices despite decline in global rates

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2 years ago

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  • Petrol, diesel prices recorded significant decline in global market. 
  • Average price of diesel fell to around $100 per barrel globally.
  • Price of petrol dropped to $90 per barrel for next review.

KARACHI: Despite a major reduction in the international prices of diesel and petrol, the government has decided not to decrease the prices for local consumers to adjust the previous exchange losses as well as to raise taxation on the fuels, The News reported citing sources. 

The petrol and diesel prices in the global market have recorded a significant decline and average fortnight prices of both products would be taken for the next price revision on February 28, 2023.

According to the oil industry sources, the average price of diesel for the next fortnightly review dropped by $7 per barrel, which in terms of the Pakistani rupee comes to a Rs30 per litre reduction for the domestic price of diesel. The average price of diesel in the global market fell to around $100 per barrel compared to $107 per barrel in the previous fortnight.

The average price of petrol dropped to $90 per barrel for the next review of prices compared to $93 per barrel in the last fortnightly review of prices, translating into a Rs10 per litre reduction for the consumers in the local market.

Sources pointed out that rupee appreciation against the dollar in the last two weeks also helped cut the import price of diesel and petrol, as the average exchange rate dropped by Rs8 for the next review of prices.

Oil industry sources were however not hopeful about any major reduction in the prices of diesel and petrol for domestic consumers as the government was expected to adjust the exchange losses, which it did not pass on fully to the oil sector in the last many reviews.

For instance, an exchange loss adjustment of Rs88 per litre was due on diesel, but the government only transferred Rs12 per litre on this head, while the remaining was still to be adjusted. 

“It is likely that the government would pass on partially the adjustment because of getting space on the exchange rate side,” sources said.

Likewise, an exchange loss adjustment of Rs34 per litre was due on petrol, but the government only gave Rs12 per litre to the oil industry.

Sources said that under the conditions put down by the International Monetary Fund (IMF), the government might increase the petroleum levy (PL) on diesel to Rs50 per litre as it has now got room to do it. Currently, it is Rs40 per litre on diesel.

Sources expect a Rs10 per litre cut in diesel if the government does not impose GST, which otherwise would deprive the local consumers of the drop in diesel prices in the global market.

Official industry sources do not expect any reduction in the price of petrol for the local consumers, which otherwise would have been down by Rs10 as per the trends of its price in the global market.

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The amount of trade between Saudi Arabia and Pakistan hits $700 million.

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16 hours ago

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Through the Special Investment Facilitation Council (SIFC), Pakistan’s trade connections with Saudi Arabia have grown significantly, with bilateral trade volume rising from $546 million to $700 million and exports to the Kingdom growing by 22%.

As bilateral economic cooperation continues to grow, Saudi investors have shown a strong interest in Pakistan’s construction, energy, agricultural, and information technology sectors. The objective for exporting IT services between the two countries has been raised from $50 million to $100 million.

Saudi Arabia has set up a help desk dedicated to making it easier for Pakistani IT companies to register in the Kingdom in order to expedite commercial procedures. The goal of this program is to speed up economic collaborations between the two countries and lower administrative barriers.

The well-known Saudi restaurant chain AlBaik has revealed plans to open locations in Pakistan, which is a big step for the food service industry and should lead to the creation of new job possibilities in the area.

Officials have noted that stronger business links between the two countries lead to greater economic stability, and the SIFC has played a crucial role in promoting these trade advancements. For bilateral trade and investment projects, the Council remains a crucial facilitator.

According to a trade official with knowledge of the developments, “the establishment of dedicated support mechanisms, such as the help desk for IT companies, demonstrates a commitment to long-term economic partnership,” The goal of these programs is to improve the conditions for commercial collaboration between the two nations.

The increasing amount of trade and the diversity of investment sectors show that Saudi Arabia and Pakistan’s economic ties are changing as both countries seek to deepen their business alliances in a number of industries.

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After more than 50 years, Bangladesh and Pakistan resume direct trade.

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After more than 50 years, the two governments will resume direct bilateral trade, with Bangladesh’s food ministry announcing Sunday that it will receive a supply of 25,000 tonnes of rice from Pakistan next month.

After former Prime Minister Sheikh Hasina was overthrown last August, relations between Bangladesh and Pakistan have begun to improve after decades of tense relations.

Since then, there have been increased bilateral interactions between Bangladesh and Pakistan. Nobel laureate Muhammad Yunus, the interim government’s senior adviser, has met twice with Pakistani Prime Minister Shehbaz Sharif.

According to the food ministry, Dhaka completed an agreement earlier this month to import grains from Pakistan.

“On March 3, the first shipment of 25,000 tonnes will reach Bangladesh,” Zia Uddin Ahmed, a ministry assistant secretary, told Arab News.

“This is the first time that Bangladesh has started importing rice from Pakistan at the government-to-government level since 1971.”

Following direct maritime contact between the two South Asian countries in November—a Pakistani cargo ship stopped in Bangladesh for the first time since 1971 with imports and exports arranged by private companies—their trade relations grew.

Resuming trade with Pakistan is a significant step for Bangladesh, according to Amena Mohsin, a lecturer at North South University and a specialist in international relations.

“We want to see progress in our bilateral relationship with Pakistan. Most significantly, we are currently going through a low point dispute with India, even though we constantly diversify our partnerships.

This most recent move to purchase rice from Pakistan is really significant in this context,” she told Arab News.

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The total amount of Pakistan’s liquid foreign reserves is $15.95 billion.

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4 days ago

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As of February 14, Pakistan’s total liquid foreign reserves were $15,947.9 million, with the State Bank of Pakistan’s (SBP) holdings being $11,201.5 million.

Official figures for the week ending February 14, 2025, show that the central bank’s liquid foreign exchange reserves rose by $35 million to $11,201.5 million.

Commercial banks maintained net foreign reserves of $4,746.4 million during the period under review, according to the breakdown of foreign reserves.

The nation’s total liquid foreign reserves as of the week ending February 07, 2025, were $15,862.6 million.

Of these, the central bank held $11,166.6 million in foreign reserves, while commercial banks kept $4,696 million in net reserves.

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