Rising oil prices jolt Pakistan’s fragile economy

Pakistan’s fragile economy is facing new challenges as global oil prices continue to rise and tensions in the region disrupt important supply routes. A report by The News, citing The New York Times, said the situation is creating serious economic pressure for the country.

Pakistan imports more than 85 percent of its crude oil from Saudi Arabia and the United Arab Emirates through the Strait of Hormuz. However, ongoing conflict in the region has affected this key route, increasing uncertainty for Pakistan’s energy supply and economy.

Farmers across the country say higher fuel prices are making it difficult to manage costs as the harvest season approaches. At the same time, some schools are preparing to shift to online classes. According to the World Bank, nearly half of Pakistan’s population of about 250 million lives in poverty, and many families do not have access to laptops, tablets, or stable internet connections. With Eid ul Fitr approaching, many people are also cancelling trips to their hometowns, reducing the usual festive activity seen at the end of Ramadan.

Economist Kaiser Bengali said Pakistan is already surviving through loans, including financial assistance from the International Monetary Fund, and warned that any long-term disruption in oil supplies could severely harm the country’s economy.

Rising energy prices are affecting many South Asian countries where a large number of people rely on daily wages. In India, some restaurants have removed slow-cooked dishes to save cooking gas, while one city has suspended gas-based cremations. Bangladesh has temporarily closed universities to conserve electricity, and Nepal is considering rationing cooking gas.

Pakistan has been particularly affected because most of its fuel arrives through the Strait of Hormuz, where tensions involving Iran have disrupted shipping. Since late February, at least 16 ships, including oil tankers, have reportedly been attacked in the Persian Gulf. As a result, tanker traffic has slowed, and many ships remain docked in Karachi.

The government increased fuel prices by 20 percent on March 6 to prevent hoarding. However, the price surge has hit farmers and daily wage workers hard. Agriculture contributes over 23 percent to Pakistan’s GDP and employs about 37 percent of the workforce.

Farmers say higher diesel prices are increasing the cost of running tractors and transporting crops. City residents are also affected, including taxi drivers and commuters who depend on diesel-powered rickshaws.

Meanwhile, the government is exploring alternative oil supply routes and encouraging measures such as online schooling and reduced official travel to manage the crisis. However, economists warn that steps like reducing the workweek could hurt workers who rely on daily income. Rising prices are also expected to affect Eid shopping, as many families focus on basic necessities instead of spending.