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Believe it or not: Domestic cylinder costs over Rs 3,000 in Pakistan amid inflation

In September, Pakistan experienced its first inflation increase in four months, driven by government-mandated fuel price hikes aligned with IMF conditions for a $3 billion bailout program.

Nitin Kumar Edited By: Nitin Kumar @Niitz1 Islamabad Published on: October 04, 2023 14:02 IST
Image Source : PEXELS Domestic cylinder costs over Rs 3,000 in Pakistan.

Pakistan's inflation rate surged in September, marking the first increase in four months, following the government's decision to raise fuel prices as part of its commitments to the International Monetary Fund (IMF) under a $3 billion bailout program. Consumer prices in Pakistan climbed by 31.44% in September compared to the same period the previous year, according to data released by the Pakistan Bureau of Statistics. This figure exceeded expectations, surpassing a Bloomberg survey's median estimate of a 30.95% increase and a notable uptick from the 27.4% inflation recorded in August.

India Tv - Pakistan

Image Source : TWITTEROfficial press release of Oil and Gas Regulatory Authority (OGRA).

The spike in inflation could potentially prompt policymakers to consider an increase in the benchmark policy interest rate, with the next meeting scheduled for October 30. Prior to this recent uptick, record-high interest rates had effectively cooled prices for three consecutive months, starting from June. As a result, the central bank had refrained from taking further action in its previous meeting.

The central bank anticipates that inflation will continue to rise in the coming month due to increased energy prices, with some moderation expected through June of the following year. The bank's average projection for inflation this year ranges from 20% to 22%, according to reports from Bloomberg.

Pakistan's caretaker government had raised fuel prices to align with the surging global energy costs, in accordance with IMF conditions for the continuation of the bailout program initiated in July. These price hikes are likely to impact the cost of living for many Pakistanis, potentially sparking protests among a population already grappling with economic challenges.

Official data reveals that transportation costs surged by 31.26% in September compared to the previous year, while food prices recorded a significant increase of 33.11%. Additionally, housing, water, and electricity prices increased by 29.70%.

Furthermore, the Oil and Gas Regulatory Authority (OGRA) raised Liquefied Petroleum Gas (LPG) prices by Rs. 20.86 per kilogram, setting it at PKR 260.98 per kg. The domestic cylinder price was also adjusted, rising to PKR 3,079.64.

However, Pakistan may find some respite from its persistent inflation challenges following the government's recent crackdown on dollar hoarders and smugglers. This action has contributed to the strengthening of the Pakistani rupee, making it the best-performing currency globally in September and potentially reducing the cost of imports.

Also read | Pakistan: Nawaz Sharif to surrender to court with 'protective bail' upon return, says party leader

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