By Nuzhat Nazar
Energy prices do not rise in isolation. Wars, geopolitical tensions, and supply disruptions push global oil markets into uncertainty, and countries like Pakistan inevitably feel the impact. The ongoing instability in key oil-producing regions has once again been cited as the primary reason behind the latest fuel price increase.
But in Pakistan’s case, that explanation only tells part of the story.
Yes, global prices matter. But the way those prices are translated into domestic fuel rates is shaped just as much by internal policy decisions. And right now, the structure of pricing suggests that fiscal pressures are being passed directly onto the public.
The burden is no longer coming from one direction. Fuel prices have increased. Motorway tolls have gone up. Electricity and gas charges remain high. At the same time, the cost of daily essentials continues to climb. What people are experiencing is not just inflation, but a constant home income squeeze from multiple sides.
At the center of this structure is the petroleum levy, which has become the largest component of petrol pricing. This is not dictated by global markets. It is a domestic policy tool. That makes the situation fundamentally different from a simple pass-through of international oil prices.
The response so far has been limited and fragmented. Measures like free public transport for a short period may provide some relief, but they do not address deeper structural issues. Not everyone uses public transport, and even those who do face limitations of routes, timing, and accessibility.
What is missing is a coordinated crisis management approach.
Transport is the most immediate place to start. A compulsory carpooling model on major roads can significantly reduce fuel consumption in urban centers. If combined with partial work-from-home policies and restricted private vehicle use on weekends, the reduction in fuel demand could be substantial. Essential services such as banks, hospitals, and schools can continue normal operations to maintain stability.
The next area is logistics. Pakistan relies heavily on road transport for freight, which consumes large volumes of diesel. A shift towards rail-based logistics, even if gradual, can bring immediate efficiency gains. Railways are far more fuel-efficient than trucks. Alongside this, temporarily slowing down non-essential construction activity can reduce both fuel and energy demand.
Energy management also needs to move from pricing to discipline. Managing peak electricity consumption during evening hours can ease pressure on the system, especially if supported by reduced daytime demand through remote work practices. At the same time, regional energy sourcing must become a practical strategy rather than a talking point. Exploring options with neighboring countries like Iran can help lower input costs and provide some relief to consumers.
Another missing element is targeted consumption policy. During recent energy crises, European countries introduced systems that protected basic consumption while charging higher rates for excessive use. Pakistan’s current approach does not differentiate. It places a uniform burden on all consumers, regardless of their level of usage.
Taxation also needs to be reconsidered. While Pakistan has increased its reliance on indirect levies, other countries took the opposite route during inflationary periods. Spain, for example, reduced fuel taxes to ease pressure on its population. The contrast highlights a key difference in approach. One prioritizes relief, the other prioritizes revenue.
In the end, this is not just about global oil prices. It is about how those prices are managed at home.
Right now, the system appears to be designed to absorb fiscal stress by transferring it to the public. A more balanced approach would focus on reducing demand, improving efficiency, and protecting essential consumption.
Crises will always exist.
But whether they become unbearable for the public depends on policy choices.
Nuzhat Nazar is a journalist and strategic affairs analyst with more than ten years of experience reporting on foreign policy, defence, and economic developments. Based in Islamabad, she focuses on geopolitics, regional security dynamics, and Pakistan’s positioning in a shifting global order.