Pakistan government considers freezing petroleum product prices despite global increases
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View on mapPetrol, diesel prices to go up further within days
ISLAMABAD: The federal and provincial governments have made up their mind to allow another major hike in petroleum prices within a week to transfer the partial impact of the landed cost of imports to general consumers and provide subsidised petrol and diesel to targeted segments like bikers and farmers. “Prices of both petrol and diesel are set to go up within days. The quantum of increase is being worked out, depending on latest changes globally,” a senior government official told Dawn after a meeting coordinated by Finance Minister Muhammad Aurangzeb with all the provincial governments, including all the four chief ministers, KP’s finance minister, besides a host of federal economic ministers and secretaries. “Even full pass on of international impact cannot be ruled out in prices, albeit with protections to selective segments, depending on provincial priorities,” he said. The current price gap is estimated at around Rs100 per litre for petrol and more than Rs200 per litre on diesel. The debate was still there if the full petrol price and half of the diesel gap should be passed on to consumers and would be finalised on the basis of the latest price calculation to be provided by the Petroleum Division and Ogra on coming Friday. The Centre has already provided about Rs129bn worth of subsidy on these products over the past three weeks and would not go beyond Rs158bn. Background discussions with key people in the ministries of petroleum and finance suggest that President Asif Ali Zardari and Prime Minister Shehbaz Sharif, after detailed discussions, had prevailed upon the four provinces to “participate in the noble cause” of sharing the burden of subsidy on petroleum products being extended single-handedly by the centre. It was agreed that Punjab and Sindh would provide fuel subsidy on the basis of their respective populations, as envisaged in the NFC and Balochistan and KP to share the burden on the basis of their respective consumption. The two larger provinces reiterated their demand to pass on full price hike on both products while providing direct targeted subsidy to priority sectors only but were advised against for being ‘politically explosive’. Aurganzeb meets four CMs as Centre asks provinces to share burden There was still no clarity what to come next as global prices surged suddenly on Monday and Tuesday after a few days of easing. Therefore, despite discussions and persuasions by the finance minister, the amount of provincial financial commitments could not be secured. It was, however, agreed that all provinces would directly subsidise their bikers with an announcement from the prime minister for quantity of rationing for a national uniformity. The price for bikers and three-wheelers would be finalised based on latest landed cost of imports. Sindh would be providing diesel subsidy to farming community through its Hari card database and Punjab and KP also agreed to follow suit on same lines. The real challenge was, however, in case of goods transportation because that had inflationary impact particularly on perishable and other eatable items. It was estimated that given the current pricing trend, these steps would need about Rs15-18bn weekly subsidy to be shared by the provinces. Even in case of the need going up to Rs30bn a week, this could be jointly absorbed over the next three months till the close of fiscal year ending June 30, although it was not clear where the pricing movement would end up or these rates would become ‘new normal’. The provinces agreed not to increase fares for their Bus Rapid Transit (BRTs) but it was pointed out that this would create disparities for populations beyond big cities. An official statement quoted the finance minister as saying that the meeting was a continuation of ongoing consultations started “under the guidance of the top political leadership for developing a coordinated and sustainable approach to petroleum pricing and subsidy reforms”. He underscored the importance of collaborative decision-making and maintaining close coordination between the Federation and the provinces. It was agreed that a working framework outlining the broad contours of a possible targeted subsidy mechanism will be developed and shared with all stakeholders for further input. The provinces will continue to refine their proposals in light of the discussions, with a view to reaching a consensus-based and practical solution, it added. Published in Dawn, April 1st, 2026
DawnApril 1, 2026 at 04:51 AM UTCLights out, bills up as summer approaches
The government is finalising a plan to curb summer electricity consumption through scheduled outages, compulsory conservation measures, and higher tariffs as cooling demand rises in the coming weeks. The move reflects a deepening fuel shortage caused by a complete disruption of LNG supplies, constrained Thar coal output, and costly alternatives like furnace oil and imported coal. With peak demand expected at 27–28 GW, officials say daily power cuts and steeper bills are unavoidable Pakistan’s ongoing energy stress, triggered by the US-Israel war on Iran, stems primarily from two shocks: the total disruption of Qatari LNG imports — already reflected in reduced utilisation of gas-fired plants — and the escalating cost of other imported fossil fuels such as oil and coal, the full impact of which has yet to be felt by consumers and the economy. Dr Khalid Waleed of the Sustainable Development Policy Institute (SDPI) estimates that a full summer blockade of the Strait of Hormuz could cut 8,800 GWh of RLNG-based generation. “With replacement fuel premiums costing an additional Rs100-110 billion and idle capacity charges of RLNG plants amounting to Rs35bn, tariffs will go up by Rs6–8/kWh through emergency FCA adjustments. Average residential bills may exceed Rs55–60/kWh,” he warned. He added that the foreign exchange impact would ripple across sectors, as emergency procurement of Residual Fuel Oil (RFO) and coal at war-driven premiums, along with fertiliser imports of 1.5–2 million tonnes to replace lost RLNG-based urea production, likely costing $2.5-3.5bn in a single quarter. Peak electricity demand expected to hit 27-28GW The key questions confronting Pakistani policymakers, therefore, are how to fill the power generation gap caused by the LNG supply disruption and how to keep electricity prices stable despite rising global fuel costs. The government’s response revolves around three measures: increasing the use of domestic gas and indigenous coal in the power generation, expanding reliance on imported coal, and, in emergencies, increase the use of oil. “While the first step being considered by the government makes sense in the short run, the second and third steps are not viable even briefly given the rising costs of coal and oil in the international market and Pakistan’s fragile financial position to finance their import,” argued Manzoor Ahmed, a researcher at the Policy Research Institute for Equitable Development (PRIED). “It is also clear that Pakistan cannot go back to LNG-based power generation even in the medium term because its main supplier, Qatar, will require a couple of years to resume its supplies disrupted by the war.” Mr Ahmed noted that domestic gas could offer short-term relief but cannot fully bridge the power gap over time. Currently, it meets less than 70pc of demand, and even optimistic new discoveries are unlikely to close the deficit in the coming years. He added that much of this gas is tied to fertiliser production, vital for agriculture. Diverting it to power generation would disrupt fertiliser supply, raise prices, and harm farm output, undermining a sector that has sustained growth as Pakistan’s manufacturing base has struggled in recent years. Energy experts say that domestic coal also faces supply constraints due to weak investor interest, delays in construction of a railway line to transport coal and other factors from Thar to other parts of the country. The sponsors of coal mines are also finding it difficult to finalise coal purchase agreements with prospective buyers. ‘Global coal markets highly volatile’ The option of increasing coal imports from Indonesia and South Africa, relatively insulated from the Middle East conflict, to boost power generation remains less feasible. While prices remain below the 2022-23 peaks, Mr Ahmed warned that global coal markets are highly volatile. He noted prices have already risen about 30pc in the first month of the Iran conflict. With major consumers like India, Korea and Indonesia delaying coal plant retirements, demand and prices are expected to rise further. This leaves one viable medium- to long-term solution: accelerating the ongoing shift towards solar energy and supporting it with battery storage systems. Over the past eight years, Pakistan has seen a dramatic surge in solar adoption. A joint PRIED-TransitionZero report estimates that 51,000MW of solar capacity was imported between 2017 and 2025 at a cost of $7bn, with about 33,000MW already installed. Another study by Renewables First and the Centre for Research on Energy and Clean Air finds this boom has reshaped the energy mix, helping shield consumers from immediate LNG supply shocks and price spikes amid the war in Gulf. Experts highlight that China has played a central Pakistan’s solar transformation, reshaping the economics of its energy transition. Its vast manufacturing scale, integrated supply chains and state-backed policies have sharply reduced global photovoltaic prices, making solar one of the cheapest power sources worldwide. This decline, reinforced by an influx of low-cost Chinese panels, enabled Pakistan – with zero-rated import taxes – to rapidly scale adoption. The economic benefits have been compelling for households, farmers and businesses facing high tariffs and unreliable grid supply, as solar offers predictable long-term savings. Easy access to Chinese technology has removed supply bottlenecks, driving a consumer-led shift to distributed solar at an unprecedented speed. Beyond affordability, this expansion has strengthened energy security by reducing reliance on imported fuels such as LNG, partially insulating the country from external supply shocks, experts said. However, this rapid growth has also revealed a critical structural imbalance. Solar generation, by its nature, primarily meets daytime demand. The real challenge emerges during summer nights, when air-conditioning demand peaks but solar output drops to zero due to near-zero battery adoption. As a result, even solar-equipped households remain dependent on the grid after sunset. Dr Waleed noted that 10-18GW of distributed rooftop solar installed in recent years displaces 3,500–4,000 GWh of grid demand during daylight hours in a summer quarter, absorbing up to one-third of the shortfall. “However, output drops to zero after sunset, shifting the entire evening peak back to thermal generation. In a Hormuz blockade scenario, this would lead to severe night-time load-shedding. With no battery storage capacity, excess daytime solar cannot be utilised during peak evening hours, he explained. Mr Ahmed emphasised that Pakistan’s subsidy-free solar boom shows strong consumer willingness to invest, provided the government avoids deterrents like taxes on panels or restrictive net-metering policies. He criticised the lack of support for low-income groups, noting that over 25pc of Pakistanis still lack electricity despite the potential of decentralised solar systems. He argued that expanding solar access would not require major grid investments and could unlock economic opportunities. The government should remove taxes on solar equipment, offer subsidised schemes for low-income households, and support mini- and micro-grids for localised energy distribution. Mr Ahmed also warned that rising global demand for Chinese solar panels could increase prices, making timely policy support essential. Sustaining solar growth is vital, he added, as it has already saved $5bn–$12bn in fuel imports since 2018 and can further protect foreign exchange reserves. “Second phase” More importantly, he stressed that the government should remove all taxes on the import of battery energy storage systems (BESS) and related equipment, he argued. This would trigger a “second phase” of Pakistan’s solar transition by improving energy independence and security. He noted that global demand for batteries is rising as countries turn to China for supply, pushing prices higher, making timely policy support essential. Published in Dawn, April 1st, 2026
DawnApril 1, 2026 at 03:02 AM UTCLNG supplies under force majeure, not available for power generation, say officials
ISLAMABAD: Government officials said during a public hearing on Tuesday that liquefied natural gas (LNG) supplies were under force majeure and not available for power generation. Force majeure is a clause included in contracts that allows a party to be excused from its obligations due to circumstances that are beyond its control. The officials’ revelation during the National Electric Power Regulatory Authority (Nepra) hearing thus means that LNG supplies were unavailable due to circumstances that were beyond the relevant parties’ control. Responding to questions, Central Power Purchasing Agency (CCPA) Chief Executive Officer Rehan Akhtar said LNG supplies were currently under force majeure, but he assured that coal supplies — another source for power generation — through imports were not facing any problems as they mostly came from South Africa and Indonesia, and were unaffected by disruptions in the Middle East. LNG-based power plants have a generation capacity of more than 4,500 megawatts. An almost a month-long ongoing US-Israeli war on Iran has spilled over to draw in Gulf countries and subsequently resulted in a global fuel crunch. The situation is worsened by traffic disruptions in the Strait of Hormuz — a corridor that had been the route for 20 per cent of global LNG and a quarter of seaborne oil until the war began. The war has also led to production stoppages, notably by Qatar, which stopped all operations at its LNG facilities on March 2 and declared force majeure two days later, halting supply from a source that accounts for about 20pc of global LNG. Officials at the Nepra hearing said consumers would be encouraged through a pricing package to better utilise cheaper electricity available during the daytime. “The cheaper electricity available during daytime will be utilised in a better way, and measures would be taken after taking people into confidence over whatever the situation is,” said Naveed Qaiser, the chief financial officer of the Power Planning and Monitoring Company (PPMC), as he testified at the hearing. He assured that fuel cost adjustments would not go up by Rs8-10 per unit, saying that the government was working on a daily basis and at almost every level to ensure that consumers did not face any problems. “Things are under control at the moment, and no big shock is forseen”, he said, adding the government was also working on a tariff package to encourage better utilisation of electricity during the daytime when solar power generation was also possible. For his part, Akhtar said LNG-based power plants, though among the most efficient, could not be run on domestic gas through diversion from older plants on dedicated gas fields. Responding to a question, the CPPA chief said there were some problems regarding coal transportation for Sahiwal and Jamshoro power plants. He said the Power Division, CPPA and other relevant government agencies were working on a daily basis to ensure that coal inventories did not deteriorate and to run power plants at maximum capacity. He also assured worried industrial consumers that electricity rates for April would remain unchanged as a Rs1.64 per unit positive fuel cost adjustment (FCA) for February consumption would replace an existing Rs1.63 per unit positive FCA for January consumption that was charged in March bills. Akhtar also said that power supply from the national grid to K-Electric (KE) was beneficial for both Karachi and other consumers. “If KE had not been provided any electricity from the national grid, an overall increase of Rs1.05/kWh in the FCA and an increase of Rs3.03/kWh in the capacity purchase price would have resulted for the consumers. Total cost would then have been Rs4.08/kWh for February”, he said. Not only this, the quarterly tariff adjustment against February consumption was expected to be Rs2.79 per unit lower, thus providing a net relief going forward. He also said circular debt would not exceed Rs1.69tr at the close of the current fiscal year, notwithstanding seasonal fluctuations and subsidy payments from the budget. PPPMC CFO Naveed Qaiser said that circular debt in January stood at Rs1.7tr compared to Rs2.4tr in January last year, which was a reduction of about Rs780bn. For their part, industrial representatives asked Nepra to recommend to the government the formulation of a fixed and all inclusive industrial tariff regime for export and import substitution insutries to avoid uncertainties, and such a tariff including FCA, quarterly tariff adjustment, debt servicing surcharge and other charges be fixed within eight to nine cents per unit, with a hard ceiling of nine cents for at least five years to ensure international competitiveness. Officials reported that the government had successfully absorbed significant cost pressures to ensure that the benefits of tariff adjustments were passed on to the public. Despite global fuel price volatility, cumulative relief amounting to Rs46.56bn had been provided to consumers during the first eight months of FY2025–26 (July–February), resulting in an overall reduction of Rs0.71/kWh at the consumer-end tariff, they said. Industrial consumers, meanwhile, witnessed a substantial decline, with pre-tax tariffs falling from Rs49.19/unit (18 cents) in March 2024 to Rs34.75/unit (12 cents) in March 2026 — a reduction of Rs14.44/unit, it was reported. The hearing was told that the incremental tariff package had resulted in 25 per cent growth in electricity consumption in the industrial sector and 7pc growth in the agriculture sector. More than 43pc of industrial consumers and 35pc of agriculture consumers benefited from the package, with 203,367 consumers availing the incentive package for higher consumption at lower rates.
DawnMarch 31, 2026 at 07:17 PM UTCRising oil prices pose risk to Pakistan’s import bill, macroeconomic conditions, finance ministry warns
ISLAMABAD: Showing cautious optimism over Pakistan’s short-term economic outlook, the finance ministry on Tuesday warned that rising global oil prices due to the US-Israel war on Iran posed risks to the country’s import bill and macroeconomic conditions in the long-term. “Rising global oil prices and potential supply chain disruptions may exert pressure on industrial input costs”, said the Ministry of Finance in its Monthly Economic Update and Outlook, with the estimated rate of inflation growing by up to 8.5 per cent for the month. It said the near-term outlook for the country’s economy remained cautiously optimistic despite emerging geopolitical risks. Recent data indicated improving momentum in the industrial sector, with higher imports of textile machinery, transport and construction-related inputs, likely to translate into higher domestic industrial activity. The finance ministry said the government was actively pursuing prudent measures, including maintaining adequate petroleum reserves, managing energy demand, and adhering to fiscal austerity to protect the domestic economy. “Inflation is anticipated to remain within the range of 7.5 to 8.5pc for March 2026,” it said. On the external front, high inflows of remittances were expected, particularly an increase in money transfers associated with Eid, although their trajectory would depend on economic conditions in the host countries. Encouraging trends in information technology exports were also providing additional support to foreign exchange earnings. The current account deficit was likely to remain manageable, while rising oil prices posed a risk to the import bill, the ministry said. Notwithstanding the downside risks amid global uncertainties, the latest indicators suggested that the economy was better positioned to absorb external shocks and maintain overall resilience in the coming months, it added. The ministry further said the country’s economy experienced encouraging progress across key indicators during the first eight months of the current financial year. Notably, the current account recorded its largest surplus of the year in February, supported by the growth in remittances and the decline in imports. IT exports continued the growth momentum, reinforcing the country’s development in digital transformation. Therefore, foreign exchange reserves rose to a four-year high figure, with a notable rise in central bank holdings, signalling stronger sovereign liquidity and better crisis response capacity. Meanwhile, large-scale manufacturing recorded strong double-digit growth in January, adding further impetus to industrial recovery and supporting overall economic activity. In the wake of the emerging US-Israel and Iran conflict, proactive planning and austerity measures on the energy front were helping secure adequate fuel reserves, thereby ensuring smooth operations. Despite regional and external challenges, the country’s preparedness and reform measures, along with encouraging progress on the domestic front, were laying the groundwork for sustainable growth prospects, the ministry concluded.
DawnMarch 31, 2026 at 03:36 PM UTCPM directs strict action against smuggling, hoarding of petroleum products
Prime Minister Shehbaz Sharif on Tuesday instructed that stringent measures should be taken against the smuggling and “illegal hoarding” of petroleum products, a statement issued by his office said. The statement was released by the Prime Minister’s Office (PMO) after the premier chaired a meeting in Islamabad with a focus on the petroleum products’ supply chain and austerity measures that were announced in view of the ongoing Middle East conflict. The conflict began with the US and Israel launching attacks on Iran on February 28. The world has faced a fuel crisis since, primarily resulting from the disruption of traffic in the Strait of Hormuz — a corridor that had been the route for 20 per cent of global liquified natural gas and a quarter of seaborne oil until the war began. In view of the situation, the government announced unprecedented austerity measures on March 9 and initially also hiked petrol and diesel prices by Rs55 per litre. But, according to PM Shehbaz, he has rejected proposals for a further hike in the prices of two oil products thrice since then. The meeting that he chaired on Tuesday reviewed measures to provide relief to low-income groups in the present situation, the PMO statement said. “The prime minister directed the relevant ministries to consult provinces on the matter and then present final recommendations,” it said, adding that he also issued instructions for strict action against the smuggling and “illegal hoarding” of petroleum products. It quoted PM Shehbaz as saying: “The federal government has taken significant steps over the past three weeks to provide relief to low-income groups, and it will continue to take such measures in the future as well.” He said the federal government had managed to provide a relief of Rs129 billion to the common man by making cuts in the development budget and implementing austerity measures. “Sufficient stocks of petroleum products are available to meet the country’s requirements due to the federal government’s timely decisions,” he added. “Providing relief to the people is our top priority,” he asserted. The PMO statement said the meeting was also briefed on the progress of the implementation of austerity measures and was told that the petroleum products’ supply, demand and the supply chain were being regularly monitored through a digital dashboard. Several federal ministers and officials attended the meeting, the statement said.
DawnMarch 31, 2026 at 01:56 PM UTCProvinces to share oil subsidy burden under NFC formula
• President, PM chair high-level meetings on austerity measures • Proposed smart lockdowns shelved, may be reviewed later • Emergency steps include grounding of 60pc of official vehicles ISLAMABAD: In a significant development, the provinces have finally agreed to share the burden of the oil subsidy being passed on to local consumers amid prevailing global economic challenges, while the government shelved the issue of proposed lockdowns in the country. The decisions were made in a crucial meeting presided over by President Asif Ali Zardari on Monday. Besides Prime Minister Shehbaz Sharif, the meeting was also attended by Deputy Prime Minister Senator Muhammad Ishaq Dar, PPP Chairman Bilawal Bhutto-Zardari, federal ministers and all four chief ministers. Khyber Pakhtunkhwa Chief Minister Sohail Afridi’s presence was considered significant, as he usually does not attend such meetings due to the political differences of his party, the Pakistan Tehreek-i-Insaf (PTI), with the ruling alliance. “The issue of proposed smart lockdowns was shelved, while provinces have agreed to share the burden of the oil subsidy being given to the people according to their share in the National Finance Commission (NFC) Award,” a participant of the meeting told Dawn. He said the issue of proposed smart lockdowns was discussed and would continue to be considered in the days to come. Pakistan is one of the countries facing fuel crisis due to the ongoing US-Israel war on Iran and subsequent attacks of the latter on oil-producing Gulf states. Earlier, the provinces had expressed their inability to contribute about Rs200 billion sought by the Ministry of Finance to shield consumers across the country from further hikes in petroleum prices. Both Punjab and Sindh — the two largest provinces, supposed to share more than Rs102bn and about Rs60bn, respectively — had instead suggested passing global prices on to the domestic market to create a price signal for behavioural change. Meanwhile, a press release issued by the Presidency said that President Zardari had directed that, amid oil and gas supply pressures, escalating energy costs, and the evolving regional environment, all possible measures should be taken to ease the burden of rising prices on the common man, especially for essential goods and services. The meeting was briefed on the steps being taken by the governments of the four provinces, as well as Gilgit-Baltistan and AJK, to manage price pressures, ensure the availability of essential supplies, and mitigate the impact on the public, enabling a coordinated national response. It also reviewed the broader regional situation and its potential effects on Pakistan’s security environment, economic outlook, and food security. The meeting was assured that, despite the global crisis, timely decisions had ensured no disruption to fuel supply, and that adequate fuel stocks were currently available, with arrangement for future needs also underway. The meeting was informed that proposals to increase oil prices had repeatedly been rejected by the prime minister, and that funds saved through austerity measures were being channelled towards public relief. It was noted that austerity efforts had begun with the government cutting down its own expenditures, including cuts to the development budget and the immediate grounding of 60 per cent of official vehicles. President Zardari reiterated that economically vulnerable people would not be left alone in this difficult time. He directed that coordinated decision-making be ensured, with alignment between economic management, energy planning, food security measures, and security preparedness. He also stressed the need for public awareness efforts, focusing on reducing fuel consumption, encouraging the use of public transportation and promoting shared mobility practices as part of a broader demand management approach. Earlier, in a separate meeting, Prime Minister Shehbaz said the government was making every effort to provide relief to the poor and middle-income segments and vowed not to abandon them in this challenging period. He said government expenditures and the development budget had been slashed, and 60pc of official vehicles had been grounded to initiate austerity from within. He added that owing to the timely decisions, disruptions in supply of fuel had been averted despite the global crisis. A detailed briefing was given to participants on the implementation of government measures for fuel conservation, the future course of action, and the current stock position. It was also shared that coordination was underway with the provincial governments to expedite the ownership registration of motorcycles and rickshaws to provide swift relief to the public. An Intelligence Bureau audit report on the implementation of the prime minister’s fuel-saving and austerity campaign was also presented. The meeting was informed that strict implementation of the prime minister’s austerity and simplicity drive was being ensured. The meeting was told that sufficient fuel stocks were available to meet the country’s needs, with arrangements were also being made for the future. Despite an increase in levy on high-octane fuel used in luxury vehicles, the prices of the jet fuel remained unchanged. It was further informed that adequate stocks of medicines were available to fulfill the country’s requirements, and proposals for future course of action were also presented. Published in Dawn, March 31st, 2026
DawnMarch 31, 2026 at 02:27 AM UTCGovt taking steps to ease burden on lower and middle-class amid fuel price hike: PM Shehbaz
The government is undertaking efforts to provide relief to the lower and middle classes amid a fuel price hike triggered by the global fuel crisis due to the Iran war, Prime Minister Shehbaz said on Monday. Over the past few weeks, the government has rolled out a series of austerity measures to minimise fuel consumption and announced significant cuts in development spending and restrictions on non-essential expenditures. In a meeting chaired by the premier to review the impact of the Middle East war on petroleum stocks in Pakistan and public relief measures being taken, he was informed that the government was working in collaboration with the provincial government to “finalise the process of registration for motorcycle and rickshaw owners so they could benefit from the government’s schemes,” a statement via the Prime Minister’s House (PMO) said. On March 17, the government announced it was planning a subsidised fuel scheme for motorcyclists and rickshaw drivers to cushion the impact of a massive hike in oil prices. “We will not leave the economically weaker section of the society alone in this hour of difficulty,” the premier vowed. Detailing further measures, the prime minister said the government has significantly reduced its expenses, including budget cuts in the development sector, as well as foregoing the use of 60 per cent of the government’s vehicles. The prime minister said that the government had decided not to increase the oil prices and instead direct the saved funds towards public relief. He further added that the government will be using a “digital system” to provide relief to the public. The premier added that “due to the government’s timely decision regarding the fuel crisis, there was no disruption in fuel supply for the country”. He also spoke of Pakistan’s diplomatic efforts regarding peace in the Middle East. The “implementation of measures aimed at fuel conservation, the future course of action and the current fuel stock” came under discussion as well, as per the statement. The meeting was also presented with an Intelligence Bureau audit report on the implementation of the measures and the progress of the austerity campaign, the statement said. “Adequate fuel reserves are available to meet the country’s needs, and arrangements are being made for the future as well,” the prime minister was briefed. The meeting was further informed that the recent increase in high-octane for large vehicles “has not led to any change in jet fuel prices”. “There was also ample stock of medicines to meet the national needs,” the meeting was further informed.
DawnMarch 30, 2026 at 10:21 AM UTCThe cost-of-living spillover
Geopolitical tensions in the Gulf are often only evaluated through their direct impact on investments, oil prices, shipping and energy security. However, the consequences extend well beyond macroeconomics. Case in point being the current Gulf conflict. The prices of petrol and diesel, raised by around 20 per cent, are expected to add over 8pc to domestic consumer price index inflation, according to analysts. For the average individual, the impact of this is beginning to show in everyday expenses. Keeping the fuel quota system aside, Pakistan’s over 25 million registered motorcyclists will pay an additional Rs1,200 monthly for fuel; a significant burden for daily-wage workers earning up to Rs1,500 per day. For people using their own vehicles, the cumulative cost increase will be even larger. Similarly, for groceries and commodities, consumers have already reported a 20–25pc increase in prices of everyday items. Flour prices have gone up by roughly Rs50–100. As purchasing power shrinks while salaries remain unchanged, the strain quickly comes back to the workplace, often way before human resource metrics can capture it. As lifestyle expectations become harder to sustain, people are more willing to switch jobs even when the salary gain is insignificant, or simply if the benefits are better. In fact, during the 2022 crisis, which came to be known as the “great resignation”, 56pc of employees planning to leave were satisfied with their jobs, highlighting that external economic pressures were the prime motivators behind the move. As the cost of workplace productivity rises too high, employees start making different choices and businesses feel the consequences long before the macro numbers fully catch up Financial stress also affects concentration, punctuality, engagement and effort. A detailed PwC study from the 2022 global crisis showed that the percentage of employees with money left over at the end went down from 47pc the previous year to 38pc in 2022, and 17pc of employees reported struggling to pay bills regularly. These factors were linked to lower productivity, engagement and wellbeing amongst employees. Thus, cost-of-living shocks change from being purely economic concerns to workforce management challenges. Businesses must respond proactively, treating these disruptions as people issues rather than just financial ones. Salary increases across the board are not the most viable solution, as any rate of increase is potentially wiped out by rising inflation within a few months. Therefore, advance decisions should be taken to decide forms of support when prices that impact employees rise sharply. Targeted measures such as flexible working arrangements where possible, temporary allowances or transport assistance can stabilise employees during volatile periods. The support a company provides also needs to reflect on-ground realities. Low-income employees often value practical benefits such as transport, housing support and predictable shifts. Professional employees may prioritise flexibility, medical coverage, learning opportunities and a clearer career progression. Studies of companies that successfully recovered from the Great Depression of 2008–09 show that it wasn’t pay bumps that made the biggest difference. A research analysis of 19 Organisation for Economic Co-operation and Development (OECD) countries showed that Germany’s Kurzarbeit and Japan’s Short-Time Work, coupled with government subsidies, kept millions employed and performing effectively. While naturally, Pakistan cannot replicate OECD subsidies, it can consider temporary incentives for firms to retain workers, including but not limited to energy subsidies tied to headcount, or small wage tax credits. Managers play a crucial role in this environment. Employees who are already under financial stress need supervisors who are transparent, empathetic and proactive when it comes to resolving issues. At the same time, it is important for companies to track early indicators such as absenteeism, first-90-day exits, payroll complaints and overtime stress, all of which are signals that appear before more severe retention problems emerge. Individuals, too, must adapt. Building even a modest financial buffer during stable periods can provide a cushion during tough times. Developing practical digital skills, learning sector-specific tools, and early familiarity with artificial intelligence and digital productivity tools can enhance employability. Equally important are transferable skills such as reliability, communication and documentation. These workforce dynamics are not theoretical; they emerge repeatedly in labour markets where economic volatility meets fragile household finances. The real cost is not only measured in oil prices or import bills. It is measured by how quickly household pressure builds. For Pakistan, the spillover of Gulf instability is ultimately a labour-market story. When the cost of staying productive rises too high, both blue-collar and white-collar workforces start making different choices, and businesses feel the consequences long before the macro numbers fully catch up. The writer is the Chief Commercial Officer of HRSG Published in Dawn, The Business and Finance Weekly, March 30th, 2026
DawnMarch 30, 2026 at 04:01 AM UTCFuel stocks sufficient to meet national demand, says PM
• Urges citizens to avoid travel, adopt teleconferencing at workplaces • Asks provinces to digitise vehicle registration records ISLAMABAD: Prime Minister Shehbaz Sharif on Sunday said adequate reserves of petroleum products were available in the country to meet national requirements, urging citizens to avoid unnecessary travel and adopt teleconferencing at workplaces to conserve fuel. Presiding over a meeting to review the implementation of fuel conservation and austerity measures amid the prevailing US-Israel war on Iran, the prime minister said sufficient petroleum reserves were available “due to timely government decisions” and effective monitoring of the supply chain. The assurance came as Pakistan and several other countries are faced with a sharp rise in global oil prices triggered by the Middle East conflict, which has disrupted supply routes, particularly because of the Strait of Hormuz crisis, and pushed up fuel costs internationally. The crisis has placed additional pressure on import-dependent economies like Pakistan, raising fears of inflationary spillovers and external account stress. The government has rolled out a series of austerity measures over the past few weeks, including significant cuts in development spending, restrictions on non-essential expenditures and steps to rationalise energy consumption. Petroleum product prices were also increased earlier this month, though the government absorbed a large portion of the cost. According to the Prime Minister’s Office, PM Shehbaz said providing relief to the public remained the government’s top priority and stressed that maximum possible support had been extended to citizens over the past three weeks. He said the federal government had allocated Rs125 billion through savings and reductions in the development budget to prevent a sharper increase in fuel prices. The government is also working to introduce a targeted subsidy framework for low-income groups, particularly motorcycle riders and rickshaw drivers, to ensure that relief measures are better directed and leakages are minimised. The prime minister asked provincial governments to facilitate motorcycle and rickshaw owners in registering their vehicles in their own names to improve documentation and enable them to benefit from future targeted relief programmes. He also directed authorities to enhance coordination with chief secretaries of all provinces, as well as Azad Kashmir and Gilgit-Baltistan, to ensure uniform implementation of conservation measures across the country. Officials briefed the meeting on the progress of austerity and conservation initiatives, stressing that the demand and supply of petroleum products, along with the entire supply chain, were being closely monitored through a digital dashboard. They added that arrangements for petrol imports for April had already been finalised to ensure uninterrupted availability. They noted that, unlike several countries facing fuel shortages and long queues at petrol stations, Pakistan had so far avoided major supply disruptions, reflecting “effective government handling” and “timely decisions”. A briefing was also given on a proposed mobile application-based fuel support programme for two- and three-wheeler users. The system is expected to digitise fuel distribution for eligible consumers and improve transparency and efficiency in subsidy delivery. Published in Dawn, March 30th, 2026
DawnMarch 30, 2026 at 03:04 AM UTCGovt comes up with hybrid plan to tackle power crisis
• Two to three hours of daily load-shedding expected on average besides tariff hikes • LNG supply to drop to near zero from next month; gas supply to power sector to drop sharply from April • Railways dispute impacting coal transport to power plants ISLAMABAD: While the focus currently remains on managing petroleum supplies and prices, the government is expected to adopt a hybrid arrangement of load-shedding, compulsory conservation and tariff hikes in the power sector to meet summer demand amid the ongoing Middle East crisis. Senior government officials told Dawn that the Power Division and its entities were working on multiple models to balance rising summer demand, reduced availability of imported coal and liquefied natural gas (LNG) and the higher cost of alternative fuels, particularly furnace oil, to run power plants. Officials said there would be virtually zero availability of LNG from next month and beyond — a fuel that accounts for more than one-fifth (over 21pc) of total power generation — even if the US-Israel war on Iran ends immediately. Availability of imported and local coal would also be on the lower side. Together, the two fuels account for close to 30pc of power supply to the national grid. The key replacement fuel is furnace oil, which is seldom used otherwise in normal conditions, except in the case of peak summer demand. The cost differential is enormous, although furnace oil stocks at present are more than 360,000 tonnes, sufficient for more than 25 days of full requirement, and the government has restricted the domestic oil industry from exports as a contingency measure. Giving an example, an official said the fuel cost of power generation on imported LNG and coal was around Rs20 and Rs13.50 per unit, respectively, in February. Local gas and local coal-based fuel cost is around Rs12-14 per unit. In comparison, the cost of furnace oil-based generation amounted to about Rs35 per unit and the furnace oil price had more than doubled following disruptions in the Strait of Hormuz and attacks on Middle Eastern refineries. While actual cost calculations could not be worked out in advance, an off-the-cuff estimate suggests the fuel cost adjustment could be on the higher side of Rs10-12 per unit given non-utilisation of about 5,000 megawatts of four LNG power plants — among the most efficient and economic generation facilities. Such a big difference could not be passed on to any consumer category, particularly the industry, an official said. The cost of high-speed diesel (HSD)-based generation, which previously exceeded Rs45 per unit before the US-Israel strikes on Iran, may now have risen beyond Rs80 per unit, the official said. However, he added that HSD would not be considered for power generation due to both its high cost and its critical demand in transport and agriculture, especially with the crop harvest season approaching. Summer peak demand typically rises to 27,000 to 28,000MW, compared to the current average of less than 14,000 MW during peak hours and below 9,000 MW in daytime, partly due to increasing reliance on solar power, which has helped reduce grid demand. Officials said furnace oil-based plants could be utilised during peak hours due to their ability to ramp up generation quickly. Given these constraints, the government is expected to go for two to three hours of daily load-shedding on average, depending on fuel supplies, along with strict electricity conservation measures and passing on fuel costs to consumers through the existing automatic adjustment mechanism. The final strategy will depend on the availability of natural gas. Gas companies have already indicated that no more than 80 million cubic feet per day (mmcfd) of gas would be available for power generation. About 150mmcfd of gas and LNG supplied to power plants in March will no longer be available from April onwards. Supplies to the CNG sector, already reduced to 50pc of demand, may be fully suspended to free up 25-30mmcfd, while partially curtailed gas to fertiliser plants could also be diverted to the power sector. As if the exogenous challenges were not enough, domestic mismanagement and bureaucratic wrangling also appear to be problematic, power sector officials said. They said that about 1,500-1,800MW of coal-based generation also appeared to be unreliable when it was needed the most in view of unnecessary disputes between the managements of Pakistan Railways and two coal power plants, and could only be streamlined if the prime minister took strict action. This meant that 10-15pc of the electricity generation was being jeopardised in this tug of war and non-cooperative relationship. Firstly, the railways’ high-ups were not allowing coal loading from the Khanewal Sahiwal power plant. On top of that, waggons were not being made available to the Jamshoro plant. Both plants are critical for grid stability, particularly Sahiwal, due to its proximity to major load centres. At present, Sahiwal and Jamshoro plants together generate about 1,500-2,000MW out of the total national generation of around 14,000MW. Officials warned that depletion of their fuel stocks, currently at just three to seven days, could result in an additional 2.5 to 3 hours of load-shedding. The situation also has financial implications for Pakistan Railways, as the two plants contribute over 30pc of its freight revenue. While Jamshoro has secured regulatory approval from the National Electric Power Regulatory Authority (Nepra) to transport coal via road, Sahiwal is still in the tendering process for trucking, which would increase generation costs and ultimately consumer tariffs. Officials said the matter had been taken up with Power Minister Awais Leghari for resolution through Railways Minister Hanif Abbasi or the Prime Minister’s Office. Published in Dawn, March 30th, 2026
DawnMarch 30, 2026 at 02:26 AM UTC