The recent surge in petrol and high-speed diesel prices by the federal government is a “ticking time bomb” that will trigger another round of inflation, warned Mian Zahid Hussain, Chairman of National Business Group Pakistan, President of Pakistan Businessmen and Intellectuals Forum, and several other prominent business organizations. He criticized government policies for continually increasing the financial strain on citizens.

Petrol prices have climbed by Rs 5.36 per liter, while high-speed diesel has seen an Rs 11.37 per liter increase, bringing petrol to Rs 272.15 per liter and diesel to Rs 284.35 per liter, according to the finance ministry.

Hussain emphasized that these hikes will disproportionately affect low- and middle-income individuals dependent on motorcycles, rickshaws, and small vehicles for transportation. Increased diesel costs will also inflate transport, agricultural, and food expenses, impacting both consumers and enterprises.

Although the increases were based on recommendations from the Oil and Gas Regulatory Authority (OGRA) and relevant ministries, Hussain criticized the lack of relief measures for ordinary citizens. He pointed out that the government collected Rs 1.161 trillion in petroleum levy in fiscal year 2024, with a 27% increase targeted for the current fiscal year (Rs 1.470 trillion). This demonstrates the government”s reliance on fuel as a revenue stream, placing the burden on the public, he argued.

The average distribution and retail margin of Rs 17 per liter for oil marketing firms and dealers further adds to the cost, Hussain noted, urging a review of the pricing policy and the development of relief strategies.

He cautioned that sustained price increases will accelerate inflation, raise business expenses, impede economic progress, and potentially fuel public discontent. Existing financial pressures from rising costs of food, education, utilities, and transport are already pushing public tolerance, and further fuel hikes will exacerbate these issues, particularly for the middle class.

Hussain advocated for alternative approaches, including broadening the tax base, exploring non-tax revenue options, and implementing government spending cuts, rather than imposing taxes on low-income groups.

Without corrective action, increasing petroleum costs will erode purchasing power and business sustainability, he warned. He called for transparent pricing mechanisms, a reduction in non-essential imports, and comprehensive fiscal reforms.