Islamabad [Pakistan], November 11 (ANI): Pakistan’s fragile economy has been jolted again by a surge in fuel prices, with the government announcing that petrol will now cost PKR 265.45 per litre, following a rise of PKR 2.43, while high-speed diesel climbed by PKR 3.02 to PKR 278.44. Though these adjustments are presented as routine, they have intensified inflationary pressures on citizens already struggling with rising costs, according to Dawn.
For ordinary Pakistanis, this is more than a price revision; it is another heavy blow to already stretched household budgets. Each fuel price increase triggers an inflationary chain reaction affecting food, electricity, transport, and industrial costs, embedding inflation deeper into daily life and ensuring it persists beyond short-term economic cycles.
The Pakistan Bureau of Statistics revealed that headline inflation jumped to 6.2 percent year-on-year in October 2025, marking the highest rate in a year. The spike was primarily driven by surging food prices following devastating monsoon floods and supply disruptions caused by the conflict with Afghanistan.
The State Bank of Pakistan (SBP) has kept the policy rate unchanged at 11 percent, aiming to keep inflation within the 5-7 percent range for the current fiscal year. Pakistan’s inflation stems from a combination of domestic shocks, policy inconsistencies, and reliance on imported essentials. Despite being an agricultural country, Pakistan heavily depends on imports of wheat, pulses, edible oil, and tea, all vulnerable to global price shifts and exchange rate fluctuations.
Market concerns over a delayed IMF loan tranche have further intensified fears of a weakening rupee, which traders have already factored into commodity prices, Dawn reported. The contradiction between the SBP’s tight monetary stance and the government’s extensive bank borrowing exacerbates inflationary pressures.
Pakistan’s broad money supply reached PKR 40.8 trillion by June 2025, with over PKR 10.6 trillion in cash circulation, the highest in history. Meanwhile, the energy sector’s circular debt climbed to PKR 1.7 trillion, feeding into persistent price hikes.
Pakistan’s inflation crisis has evolved beyond an economic issue; it now represents a moral test of governance and fiscal responsibility, according to Dawn. (ANI)
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