Manzar Naqvi
KARACHI: The federal government’s recent decision to reduce petrol prices has drawn mixed reactions, with economists and industry stakeholders warning that the move offers limited relief as diesel prices remain unchanged at elevated levels.
The government had earlier increased petroleum prices sharply between early March and April 2026, citing global market volatility. Petrol prices surged from Rs 266.17 to Rs 321.17 per litre on March 7, while high-speed diesel (HSD) rose from Rs 280.66 to Rs 335.86. Subsequent increases pushed petrol to Rs 458 and diesel to Rs 520 per litre by April 2.
Despite these hikes, Prime Minister Shehbaz Sharif announced a reduction of Rs 80 per litre in petrol prices, bringing it down to Rs 378. However, no relief was provided on diesel, which remains a key driver of inflation across sectors.
Experts argue that diesel plays a central role in Pakistan’s economy, powering agriculture, freight transport, and a significant portion of electricity generation. “Without reducing diesel prices, the overall cost of goods and services will remain high, limiting the impact of petrol relief,” market analysts noted.
The government has also introduced targeted subsidies for transporters, motorcyclists, and rickshaw drivers, including fuel support and monthly stipends. While these measures aim to cushion the impact of rising fuel costs, concerns have been raised regarding their implementation and transparency.
Economic observers warn that such targeted subsidies may lead to inefficiencies and potential misuse, given Pakistan’s past experience with subsidy programs. “Leakages and governance challenges could undermine the intended benefits,” experts added.
The decision by cabinet members to forgo a few months of salaries has been described as a symbolic gesture, with analysts emphasizing that broader structural reforms are needed to address inflationary pressures.
Stakeholders have called for a more balanced fuel pricing strategy, suggesting that reducing diesel prices should be prioritized to stabilize transport costs, support agriculture, and control inflation.
With fuel costs continuing to influence nearly every sector of the economy, economists stress that comprehensive and consistent policymaking will be essential to provide meaningful relief to the public.
