Information Minister Suggests Potential Drop in Petrol Prices Due to Decline in Dollar Values

“Interim Information Minister Murtaza Solangi hinted at the possibility of a reduction in petroleum prices during the upcoming review scheduled for September 30, thanks to the substantial recovery of the Pakistani rupee against the US dollar. Speaking at the Karachi Press Club on Saturday, the information minister attributed the rupee’s gain of Rs30 to Rs35 against the dollar to administrative measures implemented by the interim government in recent days.

This recovery was in response to a military-backed crackdown on hoarders, currency smugglers, and black market operators following the rupee’s historic low of Rs308 in the interbank market and beyond Rs330 in the open market earlier in the month. As a result of these efforts, the rupee rebounded significantly, reaching 291.76 per dollar in the interbank market, its highest level since September 5. This represents a 5% or Rs15 increase, aided by increased dollar inflows from exporters and remittances, as well as measures taken by the central bank to promote legal channels for foreign exchange transactions.

Minister Solangi noted that there is a strong likelihood of a reduction in oil prices in the next fuel price announcement, emphasizing that the interim government does not control fuel prices, as they are closely tied to international oil rates. He mentioned that people are likely to benefit from the decline in the dollar’s value.

In the last review on September 16, fuel prices reached historic highs as the caretaker government raised petrol prices by over Rs26 and diesel prices by more than Rs17 per litre. Currently, petrol is priced at Rs331.1 per litre, while high-speed diesel is available at Rs329.19 per litre.

Furthermore, Chairman of the Exchange Companies Association of Pakistan (ECAP),Petrol prices may fall expressed optimism earlier this week that the country’s remittances may increase by 10-20% due to the government’s crackdown on hoarders, black market operators, and dollar smugglers. Bostan explained that, as a result of the crackdown, foreign exchange companies, which previously received around $5 million per day, are now receiving $15 million per day, representing a 200% increase. He believed that if the crackdown continued, the dollar could drop to below Rs250.

Bostan also revealed that the crackdown against hoarders, black market operators, and dollar smugglers had exposed a connection between black market operators and banking staff. He disclosed that a substantial amount of dollars had been hidden in lockers of various banks, and corrupt bank staff, in coordination with black market operators, used these dollars for illegal hawala/hundi transactions. Corrupt bank staff members held the keys to these lockers and would engage in unlawful trading of US dollars in response to messages from the black market operators.”