Fuel Price Hike Sparks Economic Concerns in Pakistan

Karachi: A significant increase in fuel prices by the federal government has raised alarms over its potential impact on inflation and household budgets. Mian Zahid Hussain, a prominent business leader in Pakistan, stated that the rise in petrol and high-speed diesel prices poses a serious threat to the economy and the public.

According to the federal finance ministry, petrol prices have risen by Rs 5.36 per liter, while high-speed diesel has increased by Rs 11.37 per liter. The new rates set petrol at Rs 272.15 per liter and diesel at Rs 284.35 per liter. These changes are expected to heavily affect middle- and lower-income groups who rely on affordable transport for daily commuting.

Hussain, addressing the business community, highlighted that the diesel price surge will lead to higher transport and farming costs, which will, in turn, elevate food prices. He criticized the government for not taking substantial measures to alleviate the financial strain on the public, despite recommendations from OGRA and relevant ministries.

He revealed that the government collected Rs 1.161 trillion through the petroleum levy in fiscal year 2024, with a target increase of 27 percent for the current year. This reliance on petroleum taxes as a revenue source is seen as a burden on the public, with additional costs stemming from distribution and retail margins.

The business leader warned of further inflation, higher business costs, and potential public unrest if the trend continues. He called for a review of the pricing policy and urged the government to explore alternative revenue sources and implement fiscal reforms to relieve the public’s financial pressure.

Mian Zahid Hussain emphasized the need for immediate corrective measures to prevent further erosion of household purchasing power and business viability, advocating for transparent pricing and broader fiscal reforms.