The shadow of US-Iran hostilities is casting a long pall over Pakistan’s economy, triggering a severe fuel crisis and rampant inflation. Global energy markets are in turmoil, with oil and gas costs soaring due to supply chain bottlenecks.
Islamabad’s diplomatic maneuvers aim to ease the strain, yet progress remains elusive. The Strait of Hormuz blockade fears have choked fuel deliveries, disproportionately affecting import-reliant economies in Asia, including Pakistan.
Fuel prices in Pakistan have spiked dramatically over the past weeks, offering only fleeting relief amid ongoing volatility. Power cuts and gas deficits are now commonplace, cascading into elevated electricity tariffs as regulators prepare a steep fuel surcharge.
With summer’s high electricity demands looming, analysts foresee an even graver situation. Energy-saving mandates, like mandating early closures for stores, have backfired, costing the retail sector 200 billion rupees in a fortnight, according to industry groups.
Small, informal vendors evade the brunt, leaving formal chains at a severe disadvantage and questioning the real savings from these measures. The UNDP highlights the poverty risk for 30 million Pakistanis, exacerbated by agricultural disruptions from scarce fuel and fertilizers.
Long-term, even a swift de-escalation may not spare Pakistan from prolonged economic fallout, underscoring the fragility of its energy-dependent growth model.
