Pakistan’s leading trade body today warned of an ‘existential threat’ to the national economy and impending industrial paralysis following what it described as a staggering and unprecedented increase in petroleum prices announced by the federal government.
Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), expressed profound dismay over the hike and proposed an emergency, temporary suspension of the Petroleum Development Levy (PDL) to provide immediate relief to the industrial sector until global supplies stabilise.
The FPCCI Chief pointed out that petrol prices have surged by Rs 137.23 to an all-time high of Rs 458.40 per litre, a 42.7% jump. Simultaneously, high-speed diesel (HSD) experienced an astronomical rise of Rs 184.49, reaching Rs 520.35 per litre, which represents a 55% increase.
Mr. Sheikh stated that the business community believes this colossal spike in operational costs poses an existential threat, potentially triggering severe de-industrialisation, immobilising fragile supply chains, and unleashing a devastating wave of hyperinflation.
He noted that when combined with a previous fuel price adjustment in March 2026, the cumulative increase amounts to 77% within a single month, arguing the government should have devised a better strategy through a much-needed consultative process.
‘While we acknowledge that the ongoing geopolitical crisis in the Middle East has sent global oil markets into a frenzy, passing on an increase of this magnitude directly to the consumers and the industrial sector overnight is completely unsustainable,’ Mr. Sheikh explained, highlighting the crippling effect this will have on industrial output and export targets.
The President of FPCCI maintained that a 55% hike in diesel prices will fundamentally paralyse manufacturing. ‘Our flagship export industries are already struggling with high cost of doing business. With this latest shock, we are staring at a complete loss of export competitiveness on the global stage. International buyers will simply pivot to our regional competitors,’ he added.
Saquib Fayyaz Magoon, Senior Vice President (SVP) of FPCCI, elaborated on the cascading impact, warning that textile and manufacturing sectors face multiplied freight charges, which will drastically inflate production overheads and lead to inevitable factory closures and shift reductions.
Mr. Magoon stressed that the agriculture sector, with the harvesting season underway, cannot manage the astronomical cost of diesel. This, he said, will render the operation of tractors, tube wells, and harvesters financially unviable for the average farmer, threatening national food security.
He also cautioned that small and medium enterprises (SMEs), considered the backbone of the economy, will be the hardest hit as they lack the financial buffers to absorb such a shock, facing an immediate liquidity crisis as their operational costs double.
The SVP FPCCI emphasised the severe ripple effects on the availability and prices of daily commodities, calling diesel the ‘absolute lifeblood’ of logistics and supply chains. He concluded that pushing HSD past the Rs 520 mark means domestic freight charges will skyrocket instantly, translating directly to exorbitant price hikes for essential food items, medicines, and raw materials.