Petrol Prices in Pakistan : An Analysis

Petrol Prices in Pakistan : An Analysis

Karāchi : Pakistan | Apr 04, 2010 at 9:51 AM PDT
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What I want to analyze here is the prices of petrol in the near future. With all sorts of political uncertainties and crumbling economy the prices of petrol in Pakistan is likely to increase by a greater percentage than the international market.

The petrol price internationally in February 2008 peaked at $103.05 per barrel while the price in July reached about $147.02 per barrel (at the time of writing this article). This shows an increase of 42.67%. In the same interval Pakistan's petrol prices per liter have jumped up from Rs.53.70 to Rs.86.66 which is a rise of 61.38%.

This just proves the above point, and with no end to political crises and rising international petrol prices in sight, the effect on local petrol prices can well be imagined. The following figure shows the petrol prices in the country after the February 18 elections. All statisticians can extend that line of rising gradient and predict the future prices easily.

According to FuturePundit the petrol prices in 2012 is predicted at $225 per barrel. Comparing this with the prices in February 2008, the increase is a whopping 118.34%. As I said earlier, the Pakistani economy cannot sustain this easily and the price hike in Pakistan can be estimated at 170.22% using the same proportion of increase as today.

Assuming that the government continues to provide some subsidy as it does today (the minister has already said that no subsidies will be given on petrol next year!), the petrol prices in Pakistan in 2012 will be Rs.145.11 per liter. My guesses are a price higher than this calculation because of the war-like situation in tribal areas and the political situation which is still worsening (there's more to it!). It will probably be around Rs.160-170 per liter.

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karasiwo is based in Karāchi, Sind, Pakistan, and is a Reporter on Allvoices.
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