The Pakistan Bureau of Statistics (PBS) has reported an unprecedented 850 percent increase in gas prices over the past four months, contributing to a sharp rise in inflation across the country. During a session of the National Assembly, led by Deputy Speaker Ghulam Mustafa Shah, the PBS revealed that essential commodity prices have soared, with sugar prices increasing by 53.5 percent, palm oil by 61 percent, and soybean oil, wheat, and crude oil prices rising by 35 percent over the past five years.
The inflation spike has been attributed largely to rising utility costs, particularly gas and electricity tariffs, which have been hiked under the terms of Pakistan’s agreement with the International Monetary Fund (IMF). Gas tariffs surged by 520 percent in November 2023 and are set to increase by an additional 319 percent in February 2024. Similarly, electricity tariffs rose by 35 percent in November, with a further 75 percent increase expected in the coming months. These utility price hikes have been major drivers of the country’s ongoing inflationary pressures.
In addition to utility price hikes, the Ministry of Finance reported that mobile phone users in Pakistan have been taxed a total of PKR 338 billion over the past five years.
Despite these rising costs, Prime Minister Shehbaz Sharif highlighted a slight improvement in the weekly inflation rate, based on the Sensitive Price Index (SPI). Sharif noted that the SPI had decreased by 3.57 percent year-on-year during the week ending December 5, attributed to lower vegetable and pulse prices. However, prices for perishable goods like potatoes, onions, and edible oil continue to rise.
Meanwhile, the Asian Development Bank (ADB) approved a USD 200 million loan to help modernize Pakistan’s power distribution infrastructure. The Power Distribution Strengthening Project aims to address challenges like energy losses, climate risks, and outdated systems, focusing on three major regions: Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Sukkur Electric Power Company (SEPCO). This project is expected to reduce energy losses and improve the reliability of electricity delivery in the country.
