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Pakistan’s oil import bill goes beyond IMF projection as global prices spike

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Pakistan’s yearly import bill for petroleum products has exceeded the International Monetary Fund’s (IMF) prediction for fiscal year 2025-26 following a dramatic spike in global crude oil prices due to escalating tensions in the Middle East.

The official data showed that the oil import bill in FY2025-26 stood at $16.86 billion, exceeding IMF’s prediction of $15.28 billion by $1.58 billion.

The statistics showed petroleum imports grew 5.76% on-year, as worldwide oil prices surged and the government continued to depend on imported energy to meet domestic demand.

The surge came amid jitters in oil markets over the dispute involving Iran, Israel and the United States and fears over shipping via the Strait of Hormuz, a critical waterway through which almost one fifth of the world’s oil supply passes. The uncertainty sent benchmark crude prices considerably higher in the closing months of the fiscal year, raising Pakistan’s import expenditures.

The IMF has estimated Pakistan’s petroleum import bill to be $16.31 billion for the ongoing fiscal year 2026-27. But analysts say the forecast might be under pressure if geopolitical tensions continue and global oil prices stay high.

The hike in import bill has also been reflected in domestic fuel prices with petrol and high speed diesel touching all time high levels in the past few weeks. The higher energy price is projected to stoke inflation, broaden the country’s import bill and boost demand for foreign currencies.

Pakistan’s economy is extremely sensitive to changes in the international energy prices as it imports the major portion of its crude oil and petroleum products. Along with machinery and edible oil, petroleum is among the country’s biggest imports. Petroleum is core to the trade imbalance and current account balance.

Despite the increasing petroleum import cost, the external sector of Pakistan remained reasonably stable in FY2025-26, aided by record workers’ remittances and tighter import management. But economists warn that a sustained period of high oil prices could make it more difficult to keep the macroeconomy stable and satisfy fiscal and external sector targets established with the IMF.

In official records, Pakistan’s oil imports have been estimated at $16.86 billion in FY2025-26, although the IMF had earlier put the figure at $15.28 billion for the year. The Fund’s revised predictions show imports could stay over $16 billion in FY2026-27, although the actual number will be primarily determined by international oil prices and domestic energy use.

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PSX opens on a positive note, gains over 1,300 points in early trading

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 The Pakistan Stock Exchange (PSX) opened Tuesday’s trading session on a positive note, with the benchmark KSE-100 Index climbing more than 1,300 points.

The index surged to 164,368 points during early trading, reflecting a strong upward movement in the market.

In the previous session, the benchmark index had settled at 163,038 points.

The latest rally marks a positive start to the trading day, with the market gaining momentum after the previous session’s close.
 

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Petrol price rises by Rs1.54, diesel by Rs2.16 per litre

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Pakistan latest change in government gasoline prices has caused an increase in petrol and high-speed diesel prices and the cost of both major petroleum products has been increased ahead of Tuesday (October 27).

An official statement released by the Petroleum Division stated that the petrol price has been hiked by Rs1.54 per litre while high speed diesel (HSD) has become costlier by Rs2.16 per litre.

The price of petrol will be Rs379.25 per litre after the modification, while the new price of high speed diesel has been fixed at Rs395.82 per litre. The Oil and Gas Regulatory Authority (OGRA) has changed the ex-depot prices for October 27, 2026, and the revised rates have been calculated as per the petroleum pricing system of the government.

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Yen slips ahead of central bank bonanza, dollar firms on tech rebound

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The Japanese yen eased against the US dollar on Tuesday, further eroding last week’s safe-haven gains, underpinned by a risk-on mood and ​a weaker euro ahead of key central bank meetings this week that will influence the global rates outlook.

The yen ‌was 0.16% weaker at 157.73 per dollar, inching further away from the one-month high it touched last week ahead of the Bank of Japan policy decision later this week. The yen had lost ground on Monday too.

The BOJ is set to keep interest rates steady at 1.25% in a two-day meeting concluding on Friday, ​but signal its readiness to continue raising borrowing costs on mounting price pressures.

A key gauge of Japan’s service-sector inflation rose 3.7% ​in September from a year earlier, data showed on Tuesday, a sign of increasing price pressures that ⁠will likely keep the central bank on track for further interest rate hikes.

“We expect the BOJ will conclude that the underlying rate of ​consumer price inflation is at a level generally consistent with the 2% price stability target,” analysts at MUFG said in a note.

However, simply ​touching the target once is not enough, the analysts said, adding that the BOJ will now shift from a focus on the downside risks to inflation to a stance of monitoring risks in both directions.

The yen was among the best-performing major currencies last week, as AI jitters in the equity market spurred a ​haven rush into the currency.

Markets price slightly better-than-even odds of a December BOJ hike, so there is plenty of room for a ​rebound in the yen should Governor Ueda strike a hawkish note, said Ebury analysts in a note.

“We still favour another hike at the last meeting of ‌the ⁠year, though whether the BOJ will be prepared to commit to that just yet is unclear.”

Apart from the BOJ, four other major central banks will announce policy decisions this week. The BOJ’s meeting follows that of the Fed, which is seen skipping a hike at its two-day meeting concluding on Wednesday.

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The European Central Bank is also set to keep rates unchanged at 2.5% on Thursday. New Zealand’s and Canada’s central ​banks are expected to raise rates ​this week.

DOLLAR FIRMS ON RISK-APPETITE ⁠REVIVAL

The dollar index held steady near a one-week high on Tuesday at 102.04 as a tech-led rebound on Wall Street revived appetite for risk, while investors await megacap earnings and the US midterm elections.

Risk ​appetite returned overnight after Anthropic’s IPO filing and Meta’s (META.O), opens new tab $95 billion equity plan rekindled the artificial intelligence trade.

The ​dollar was also ⁠underpinned by a weaker euro , which fell to a near two-week low against the greenback as worries over France’s fiscal health piled pressure on the single currency. The euro last fetched $1.1165, down about 1.4% this month.

A selloff in French government bonds that drove the country’s debt-risk premium to ⁠its highest ​since the 2011 sovereign debt crisis has rekindled concerns about financial stress across the ​euro zone.

The Brazilian real stabilised after it fell sharply against the US dollar after President Luiz Inacio Lula da Silva won a historic fourth term on Sunday against Senator Flavio ​Bolsonaro, the eldest son of former President Jair Bolsonaro. 

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