Karachi: As a result of the recent increase in the prices of gas and petroleum products, there is a possibility of an increase in the rate of inflation.
Inflation is expected to rise by half a percentage point in February, and the rate of inflation will reach 25 percent, thereby eliminating the possibility of a cut in the benchmark interest rate in March.
Political instability and lack of immediate new IMF program in April will lead to further increase in inflation. The price of a 50 kg sack will increase by Rs 1,120.
Fuji Fertilizer Bin Qasim Limited will have to increase the prices of urea and DAP by Rs 1,367 and Rs 530 per bag respectively, cement price will increase by Rs 10 per bag.
Tahir Abbas, Head of Research, Arif Habib Limited, said that the hike in gas prices will increase inflation by 43 basis points, which is likely to increase the Consumer Price Index to 24.91 percent on an annualized basis.
Optimus Capital Management analyst Muaz Azam says that gas price inflation will increase by a relatively modest 35 basis points and inflation is likely to remain at 24 percent during the current fiscal year. The exploration and oil marketing companies OGDC, PPL, PSO, SNGPL and SSGC will benefit.
