"Big relief" in fuel prices is expected for consumers in Pakistan, as a brokerage firm Friday predicted a decline of Rs41 and Rs19 per litre in the prices of petrol and diesel, respectively, on Oct 16.
Arif Habib Limited (AHL), in its forecast, also predicts a 92 bps drop in inflation rates, down to 27.5%, attributing the decrease to price fluctuations in commodities and global currency markets.
The firm cited the recent significant decline in international oil prices due to demand uncertainties, a stronger US dollar, inflationary pressures, and rising supplies over the past week.
In its last fortnightly announcement of fuel prices, the Ministry of Finance provided some relief to the country's inflation-weary masses and dropped the price of petrol for the next fortnight by Rs8, the first time in two and a half months.
A cut of Rs11 was announced in the diesel price, after which the new rate of the fuel was set at Rs318.18 per litre.
Meanwhile, in its forecast, the AHL stated that the prices of West Texas Intermediate (WTI) oil, Brent, and Arablight have dropped by 9% to 11% as compared to the last fortnightly average prices.
"The international gasoline (MS) plummeted by 15% to USD 84.3/bbl compared with the last fortnightly average of USD 99.3/bbl. Similarly, the international prices of HSD took a dip of 10% to USD 110.6/bbl compared with the last fortnightly average of USD 122.3/bbl," it added.
The report mentioned the appreciation of the Pakistani rupee against the US dollar, which is expected to contribute to the fall in fuel prices.
"PKR has appreciated 2.7% to 283.87/USD compared to the last fortnightly average of 291.65/USD," AHL's forecast read.
It added that incorporating the above-mentioned prices alongside Pakistani rupee appreciation and assuming the international prices and currency remain at the same level for the next 10 days, the local petrol and diesel prices are expected to go down by Rs41 and Rs19 per litre in the next fortnightly prices.
The AHL mentioned that the exchange rate adjustment in the last fortnightly prices of Motor Spirit (MS) and high-speed diesel (HSD) was Rs11.9 and Rs-2.8 per litre, respectively.
"Even assuming the same currency adjustment for MS and nil on HSD in the upcoming fortnightly prices, the MS and HSD are expected to drop by Rs28.6 and Rs19.3 per litre," the company added.