Petrol price surge raises transport and food cost concerns.
Islamabad
Business leader and former president of the Islamabad Chamber of Commerce, Shahid Rasheed Butt, on Friday said the government’s decision to sharply increase petroleum prices has sparked concern among business community, economists and consumers, who warn that the move may intensify inflationary pressures at a time when masses and businesses are already struggling with high living costs.
Under the latest revision, the price of petrol has jumped to about Rs458 per litre, while high-speed diesel has climbed to around Rs520 per litre, marking one of the steepest increases in recent years. The hike follows a surge in global oil prices triggered by escalating tensions in the Middle East and disruptions in energy markets.
Officials say the adjustment was unavoidable because Pakistan imports most of its petroleum needs and must align domestic prices with international trends. The government has also ended broad fuel subsidies, arguing that maintaining them had become fiscally unsustainable.
However, Shahid Rasheed Butt said the decision could have been implemented more gradually to cushion the impact on the public. Fuel costs directly influence transportation, electricity generation, and logistics, meaning the increase is likely to push up the prices of essential goods, including food and agricultural inputs.
Economic observers note that diesel, which powers trucks, buses, and farm machinery, is particularly sensitive for the broader economy. A steep rise in diesel prices will translate into higher freight charges and agricultural costs, which eventually feed into consumer inflation.
Small business owners and transport operators have expressed concern that the sudden increase could erode already thin profit margins. Traders say higher fuel costs will raise distribution expenses, while public transport operators warn that fare hikes may become unavoidable if prices remain elevated.
The business leader also point out that taxes and levies constitute a significant share of retail fuel prices in Pakistan. Some experts argue that temporarily easing the petroleum levy or offering targeted relief to vulnerable groups could help soften the economic shock without undermining fiscal discipline.
The development comes at a time when Pakistan is navigating a delicate economic recovery under an International Monetary Fund programme, which emphasises fiscal consolidation and discourages broad energy subsidies.
While the government has announced plans for targeted assistance to groups such as motorcyclists and small farmers, economists say the effectiveness of such measures will depend on swift implementation and transparent targeting.
With global oil markets remaining volatile due to geopolitical tensions, policymakers may face difficult choices in the coming weeks between fiscal stability and shielding citizens from rising living costs.
