DND News Agency
The data released by official quarters regarding Petroleum Oil Lubricants (POL) is quite alarming. Despite the closure of educational institutions, 50 percent work-from-home arrangements, and other measures taken by the government, POL consumption increased by 19% in March 2026 compared to March 2025. This increase is unusual because high POL prices are expected to discourage unnecessary travel, along with the measures mentioned above.
The government on Thursday further increased the petrol price by Rs137 per litre, or 43%, reaching a historic high of Rs458.4. This came after Prime Minister Shehbaz Sharif decided to impose additional taxes on consumers, with the petroleum levy reaching a record Rs160.61 per litre on petrol.
The situation requires a serious societal response, especially as the war in the Strait of Hormuz continues and global trends already indicate a potential economic meltdown.
Official circles are of the view that the price hike in POL has nearly doubled compared to pre–U.S.-Israel attack levels on Iran. The government had to further increase prices due to unavoidable economic realities such as Public Sector Development Programme (PSDP) expenditures (already slashed by around 50%, though ongoing projects must be completed), provincial shares, and debt servicing—all of which cannot be halted.
Government sources believe that POL usage must be discouraged in the national interest, and the public should support the state in minimizing consumption. It is pertinent to mention that during the Gulf War (1990–1991), petrol prices in Pakistan increased from Rs10 to Rs20, even though it was a conflict between just two countries. In contrast, today’s conflict involves multiple countries across the region.
Providing a weekly subsidy of Rs60 billion has become unavoidable. However, such subsidies benefit both a motorcycle user and someone driving a 1300cc car equally, which is inherently unjust.
If we examine recent data, despite petrol prices being increased three weeks ago, there has not been even a one-litre reduction in consumption. In fact, compared to March 2025, petrol consumption in March 2026 increased by 19%.
Even though Pakistani oil tankers are passing through the Strait of Hormuz, petroleum products are still being purchased at international market prices. The only logistical advantage is that there has been no panic at petrol pumps, no need to deploy police, Rangers, or military at fuel depots, and no hoarding has occurred—as has been seen in some neighbouring countries.
The subsidy burden is economically unsustainable for Pakistan. Weekly subsidies of Rs60 billion, amounting to over Rs240 billion per month—are simply not viable. These funds are critically needed for national priorities such as defence preparedness, public welfare, and debt reduction.
Consumption data indicates that price elasticity is low. Despite the price hike, there has been a significant 19% increase in consumption. This clearly shows that fuel is a necessity, not a luxury. Artificially keeping prices low does not reduce usage; it only increases the fiscal burden, adding to broader economic challenges and difficulties for the common people.
