The Pakistan Institute of Development Economics (PIDE) has warned that any disruption in the Strait of Hormuz could push inflation to over 12%, exacerbating the country's already fragile economic situation. With approximately 85% of Pakistan's oil and LNG imports reliant on this critical maritime route, the closure has led to a drastic increase in fuel prices, with petrol and diesel prices rising by PKR 55 per liter on March 6. The government is now caught between maintaining fiscal discipline under its $7 billion IMF program and protecting consumers from soaring prices during Ramadan.
INTERNATIONALLast Update 13 days ago
Pakistan Inflation Surges Over 12% Due to Oil Price Hikes
81% NEUTRAL
As of March 22, 2026, the ongoing Iran war has severely impacted Pakistan's economy, with fuel prices surging by approximately 20% and monthly import bills skyrocketing from $1.7 billion to $4.5 billion. The situation has forced the government to implement urgent austerity measures, including significant cuts in government vehicle usage and salary reductions for top officials.
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