Pakistan’s government on Tuesday defended recent fuel price increases, arguing they remain lower than those seen internationally despite a sharp rise in petroleum product (POL) prices, as global energy markets continue to surge.
In a post on social media platform X, Advisor to the Finance Minister Khurram Schehzad said fuel prices have climbed steeply across both developed and emerging economies in recent weeks.
“Diesel and petrol price increases globally are significantly higher, with several countries witnessing increases of 27–71% versus Pakistan’s 22-24%,” said the official.
He added that many countries, especially emerging markets, have passed on global price shocks more aggressively. In comparison, Pakistan’s increases have remained “relatively calibrated, balancing fiscal sustainability with protecting the public”.
Schehzad also pointed out that the tax burden on petroleum products in Pakistan is lower than the regional average.
Currently, the total retail tax on POL products is about 25%, including roughly 16% on diesel and 33% on petrol, compared to a regional average of around 35%. Additionally, Pakistan is applying ‘zero’ general sales tax (GST) on fuel, whereas the standard GST rate stands at 18%.
“The broader trend highlights limited global space for prolonged subsidies, with most economies moving towards price rationalisation,” he said.
Against this backdrop, “Pakistan’s adjustments remain comparatively moderate, reflecting a calibrated approach while balancing fiscal sustainability and public impact”, the advisor maintained.
Global oil prices have climbed above $100 per barrel amid rising tensions involving Iran, the United States, and Israel.
Fatih Birol said on Monday that the agency is consulting Asian and European governments on the potential release of strategic reserves “if necessary”.
Meanwhile, oil executives and energy ministers at a conference in Houston warned about the long-term economic effects of the US–Israel conflict with Iran, although U.S. Energy Secretary Chris Wright downplayed the severity of the situation.
