Pakistan Inflation Rebounds to Double Digits on Fuel and Food Costs

The government’s decision to pass international fuel costs directly to consumers has left motorists paying a combined tax burden of PKR 116 per litre on petrol and PKR 101 on high-speed diesel. With motor fuel prices now 25 percent higher than last year, transport inflation has spiked by 20.2 percent. Data from Tola Associates indicates that diesel prices in Pakistan are currently the highest in South Asia, while petrol ranks second only to Bangladesh.

Food security remains equally volatile. Despite official claims of a 29.7 million tonne wheat harvest, failures in provincial procurement have pushed wheat prices up by 87 percent and flour by 73 percent. Urban food inflation has hit 12.1 percent, with rural areas facing a steeper 13.2 percent increase. Dramatic surges in the cost of staples—tomatoes up 128 percent and onions up 125 percent—have persisted despite government raids against alleged hoarding. To address the supply gap, the federal government has authorized the import of one million tonnes of wheat after officials in Sindh and Punjab failed to meet their targets.