Rising inflation: Once again massive hike in petrol and diesel prices

ISLAMABAD/KARACHI: As the country battled rising electricity costs, the nation experienced a double whammy of rising petrol and diesel prices at midnight and the stock market falling by 1,242 points earlier in the day. The Finance Division announced an increase in the price of gasoline by Rs. 14.91 per litre and high-speed diesel (HSD) by Rs. 18.44 per litre shortly before midnight. With the rise, the cost of gasoline has increased to Rs305.36 per litre and that of HSD to Rs311.84.

According to the Finance Division’s announcement published on X (previously Twitter), the rise in fuel prices was brought on by “variations in exchange rates and the increasing trend of petroleum prices in the international market.”

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The government increased the cost of gasoline and high-speed diesel on August 1 by Rs. 19.95 and Rs. 19, respectively. The cost of gasoline and diesel increased by Rs. 17.50 per liter and Rs. 20 per liter, respectively, on August 16.

Stocks have been in a steady downward trend throughout the week as investors have continued to be concerned about the weakening rupee and the state of the economy, according to traders.

The benchmark KSE 100-share Index for the Pakistan Stock Exchange (PSX) fell by 1,242.14 points or 2.69 percent to settle at 45,002.42 points, down from the previous session’s level of 46,244.56 points. The day’s peak index remained at 46,358.02 points, while the day’s lowest level was 44,459.63 points.

“Stocks fell record low due to economic uncertainty amid a slump in the rupee and speculations over likely hikes in interest rates on inflation worries,” said analyst Ahsan Mehanti of Arif Habib Corp.

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He claimed that the remark of the interim finance minister that there was no budgetary capacity to provide subsidies or relief for utility bills as well as worries about an unsolved circular debt crisis in the power industry were the main factors contributing to the negative closing.

In comparison to 16,420.76 points, the KSE-30 index dropped by 450.83 points, or 2.75 percent, to 15,969.92 points.

From 200.292 million shares, traded shares climbed by 87 million shares to 287.356 million shares. From Rs8.987 billion, the trading value grew to Rs12.303 billion. Market capital decreased from 6.895 trillion to 6.715 trillion rupees. 48 of the 325 active companies closed in the green, 257 in the red, and 20 stayed unchanged.

MCB, UBL, HUBC, MEBL, and PPL made the largest contributions to the index by losing value and causing it to drop by -433 points.

On Thursday, 15 stocks added to the MSCI FM Index. As part of the company’s quarterly rebalancing, bringing the number of Pakistani stocks in the index to a total of 17.

Sitara Chemical saw the largest increase, rising by Rs. 15.22 to Rs. 233.90 per share. Suraj Cotton saw a rise of Rs. 7.63 to Rs. 109.33 per share. Rafhan MaizeXD experienced a large dip, falling by Rs255 to Rs8,000 per share, and was followed by Nestle Pakistan, which fell by Rs188.38 to Rs6,911 per share.

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In the meantime, according to data from the State Bank of Pakistan (SBP), the Pakistani rupee (PKR) plunged to a record low for an eighth straight session in the interbank market on Thursday, plunging to 305.54 per dollar. On a daily basis, the rupee fell by 1.09 rupees, or 0.36 percent, against the dollar. The previous session saw the PKR conclude at 304.45. In the open market, some traders valued the rupee at 326-327 to the dollar.

However, the local currency was traded at 323 for selling against the dollar, down 3.50 rupees from the previous session. According to rates provided by the Exchange Companies Association of Pakistan (ECAP).

Analysts claim that capital outflows and the easing of import restrictions to comply with the requirements of a $3 billion bailout package from the International Monetary Fund are to blame for the considerable depreciation of the currency.

Forecasts for a spike in the August inflation numbers ahead of the data anticipated on Friday, September 1 have made investor sentiment particularly unstable.

Since the caretaker administration took power, the rupee has depreciated by 4.6%. In August, the value of the rupee fell by 6.2 percent.