KARACHI: Pakistan’s economy is bound to bear the brunt of a recent hike in fuel prices by more than 20 percent, economists and industry leaders warned this week, fearing the move is expected to slow economic growth, increase inflation and hurt already declining exports.
Pakistan’s government on Friday increased petrol and diesel prices by Rs55 ($0.20) per liter each as the ongoing conflict in the Middle East, involving Iran, Israel and the US, sent global oil prices sharply higher and disrupted energy supply routes.
The price of petrol was revised up by 21 percent to Rs321.17 per liter while diesel was increased by 20 percent to Rs335.86 per liter. International oil prices have surged by 37 percent to around $106.8 per barrel from $78 on Mar. 1, while diesel prices have increased to about $150 per barrel since the conflict began on Feb. 28.
“The economy was picking up sluggishly, so I think that space will slow down a bit,” Muhammad Saad Ali, head of research at Lucky Investments Ltd., told Arab News.
“Next year, it is expected that there will be more than 4 percent GDP growth, so potentially that might not happen,” he added.
