Inflation, again

WITH petrol and diesel prices rising at a steady clip, households are bracing for another round of caustic price increases that burn into monthly budgets and force further belt-tightening.

The Sensitive Price Indicator, the weekly inflation gauge published by the Pakistan Bureau of Statistics, was up 8.62pc for the week ended Sept 10 compared to a year ago. Onions, a staple in the local cuisine, had more than doubled in price. Fuel was sharply up: LPG 55pc dearer, and diesel and petrol costing 45pc and 39pc more, respectively, than a year ago. Wheat, another staple, was up 30pc from last year; electricity bills were higher by 25pc. Beef, mutton and chillies were also up by double digits.

It bears putting these numbers into perspective: the SPI is deliberately weighted towards tracking daily-use essentials that matter most to lower- and lower-middle-income households. In other words, these numbers represent the cost-of-living squeeze on ordinary Pakistanis.

Wages for the vast majority do not keep pace with inflation, which means ordinary people must adjust the only way they can: by reducing usage and consumption. As it is, the inflationary storm unleashed on Pakistan from 2022 onwards has set the vast majority years back in terms of quality of life. Recent statistics show that people are eating less than they did to make ends meet, which is in itself a startling indication of how badly the last bout of prolonged inflation affected households across the country.

There has been demand destruction at immense scale, and the local economy may struggle for years to escape this trap. The recent price pressures appear to be driven by the unending war in the Persian Gulf, which has roiled global markets for months now and affected Pakistan particularly intensely due to the country’s dependency on Gulf markets for its energy needs. And there is no indication it will end soon.

It is unfortunate that the government has yet to confront the challenge publicly, or show more than a cursory concern for the hardships of ordinary citizens. Granted global oil prices are not in its control, but there are other things it can do. Though the topic now seems taboo, it can still cut the petroleum levy to give relief; all it needs to do is fund the revenue shortfall from another means. It can squeeze undertaxed sectors that have traditionally enjoyed broad exemptions due to political reasons.

Authorities must also monitor the produce markets closely and step in to prevent hoarding and profiteering when needed. Inflation has a steep political cost, and lack of visible action will hurt the government in more ways than one. Silence cannot be a policy: at the very least, the citizenry needs an acknowledgment of the challenges they face and a plan to mitigate them.

Published in Dawn, September 14th, 2026