Soaring fuel prices in Pakistan threaten economic and political crises
Soaring fuel prices in Pakistan, driven by the Middle East conflict involving the U.S. and Israel, have increased the country's oil import bill from $300 million to $800 million, threatening economic stability and weakening Prime Minister Shehbaz Sharif's government. The surge in energy costs is exacerbating inflation, reducing purchasing power, and worsening living conditions for already strained households. With limited policy options and pressure from the IMF, the government faces growing public discontent and political challenges.
- ▪Pakistan's oil import bill has risen from $300 million to $800 million due to the Middle East conflict, erasing two years of economic progress.
- ▪The State Bank of Pakistan raised its key policy rate to 11.5% in response to heightened macroeconomic risks from rising global energy prices and supply chain disruptions.
- ▪Fuel price increases are driving inflation, affecting transportation, agriculture, and the cost of food and basic goods across the economy.
- ▪Pakistan's reliance on imported energy and remittances from workers in Gulf countries makes it especially vulnerable to external shocks.
- ▪The government faces criticism for failed IMF negotiations and symbolic austerity measures amid growing public anger and opposition pressure.
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Economy|US-Israel war on IranSoaring fuel prices in Pakistan threaten economic and political crisesA huge increase in Pakistan’s fuel import bill from $300 to $800 billion is putting more pressure on the economy.ListenListen (4 mins)SaveClick here to share on social mediashare-nodesSharefacebookxwhatsapp-strokecopylinkgoogleAdd Al Jazeera on GoogleinfoFilling up at a petrol station in Karachi, as prices rise, amid the U.S.-Israeli conflict with Iran, April 3, 2026 [Asim Hafeez/ Reuters]By ReutersPublished On 30 Apr 202630 Apr 2026The most serious fuel price shock to hit Pakistan in more than half a century threatens to unleash a flood of cascading crises that could batter all aspects of the economy and undermine the government of Prime Minister Shehbaz Sharif.Earlier this week, Sharif…
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