ON 6 March, Pakistan’s senior economic leadership held a press briefing to announce an unprecedented increase in fuel prices.

Deputy Prime Minister Ishaq Dar linked the decision to rising regional tensions, including Iranian strikes and the closure of the Strait of Hormuz. Officials described the situation as an exceptional global crisis, while emphasizing that precautionary steps had already been taken to manage volatility and safeguard national fuel reserves. Following this broader context, the ministers announced a Rs55 per litre increase in both petrol and diesel. The briefing concluded offering limited room for immediate scrutiny. Effective from midnight on March 7, the adjustment raised petrol prices from Rs266.17 to Rs321.17 and diesel to Rs335.86, reflecting an increase of around 17 percent.

Although the government linked the decision to the Gulf crisis and disruptions in global energy supply, a closer review of fiscal trends, policy choices, and market dynamics suggests that underlying domestic structural pressures played a more decisive role than the conflict itself. Notably, officials did not address the Federal Board of Revenue’s widening gap in collections. From July to February in FY2025–26, revenues reached Rs8.121 trillion against a target of Rs8.550 trillion, reflecting a significant shortfall and continuing a pattern from the previous year that led to a downward revision of targets by the IMF. Against this backdrop, the petroleum levy on petrol had........

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