ISLAMABAD: The government on Monday defended recent increases in petroleum prices, arguing that Pakistan’s fuel hikes remain significantly lower than those witnessed globally amid a sharp surge in energy costs.
In a statement on social media platform X, Advisor to the Finance Minister Khurram Schehzad said that petrol and diesel prices have risen far more steeply in both developed and emerging economies.
“Globally, fuel prices have increased by 27% to 71%, compared to Pakistan’s relatively moderate rise of 22–24%,” he noted, adding that many countries have passed on international price shocks more aggressively.
The government maintains that its pricing strategy is “calibrated,” aiming to strike a balance between fiscal sustainability and public relief. Officials also highlighted that Pakistan’s tax burden on petroleum products remains comparatively lower than the regional average.
According to the advisor, the overall tax component on fuel stands at around 25%—including roughly 16% on diesel and 33% on petrol—compared to a regional average of about 35%. Additionally, Pakistan currently imposes zero general sales tax (GST) on petroleum products, against a standard rate of 18%.
Schehzad emphasized that most countries have limited room to sustain subsidies and are increasingly moving toward price rationalisation in response to global market pressures.
International oil prices have surged above $100 per barrel, driven by escalating tensions involving Iran, the United States, and Israel, intensifying pressure on fuel-importing economies like Pakistan.
Meanwhile, Fatih Birol, head of the International Energy Agency, said consultations are underway with Asian and European governments regarding potential releases from strategic reserves if required.
Energy leaders and policymakers have also warned of the broader economic fallout of the ongoing conflict, though US Energy Secretary Chris Wright has downplayed the severity of the crisis.
Despite rising global volatility, the government insists that Pakistan’s fuel price adjustments remain comparatively moderate, reflecting a cautious approach to managing economic stability while mitigating public impact.
