The federal government recently announced a Rs22 per litre reduction in petrol and high-speed diesel prices. The decision lowered petrol prices from above Rs403 per litre to approximately Rs381.78 per litre and was presented as a measure to provide relief to consumers facing persistent economic pressures. Yet the public response was far from enthusiastic.
Instead of celebrations, many citizens reacted with scepticism. Others questioned whether the reduction would make any meaningful difference in their lives. The reason is simple: while petrol may have become cheaper than it was a few weeks ago, life itself remains expensive.
Petrol still costs nearly Rs382 per litre, plus the prices of food, electricity, gas, medicines, transportation, and housing remain elevated. Consequently, many households do not perceive the reduction as a visible improvement.
Public sentiment is also shaped by recent memory. Before regional tensions involving Iran disrupted global energy markets, petrol prices in Pakistan were substantially lower. Earlier this year, consumers were paying nearly Rs250-270 per litre. The subsequent surge in international oil prices pushed domestic fuel prices above Rs400 per litre. Although recent reductions have lowered prices somewhat, consumers naturally compare current rates with pre-crisis levels rather than with the record highs of recent weeks.
From people’s perspective, the latest reduction appears less like meaningful relief and more like a partial reversal of earlier price increases
From their perspective, the latest reduction appears less like meaningful relief and more like a partial reversal of earlier increases. Citizens evaluate economic conditions through their lived experiences. They judge affordability when purchasing vegetables, paying school fees, visiting hospitals, or receiving monthly utility bills. If these expenses remain, improvements in selected indicators rarely generate optimism.
When fuel prices increase, transport operators often raise fares almost immediately. Traders cite higher transportation expenses to justify price increases. Manufacturers pass additional costs on to consumers. Yet when fuel prices decline, prices rarely move downward at the same pace. Prices rise rapidly but fall slowly. Consequently, households experience the full burden of inflation while receiving only limited benefits when costs begin to moderate.
The food sector provides a clear example. Fruits, vegetables, grains, dairy products, and livestock products all rely on transportation networks that connect farms to markets. During periods of rising diesel prices, transportation costs contribute to higher retail prices. Yet when diesel becomes cheaper, consumers often see little immediate change in the prices displayed at local markets.
Part of the explanation lies in the broader inflationary environment. Businesses face multiple cost pressures simultaneously, including labour expenses, electricity tariffs, financing costs, rents, and regulatory charges. Once prices are adjusted upward, they are rarely reduced unless competitive pressures force businesses to do so.
As a result, inflation tends to leave a lasting imprint on household budgets.
Transportation expenses represent only one component of monthly budgets. Electricity bills, gas charges, school fees, healthcare costs, internet services, and housing rents continue to exert pressure on household finances. Even if lower petrol prices save a commuter a few hundred rupees per month, those savings can easily be offset by rising expenditures elsewhere.
Perhaps the most telling indicator of affordability challenges emerged during Eidul-Azha this year. Anecdotally, many people observed that some families who traditionally performed qurbani every year either opted for smaller shares in collective sacrifices or chose not to participate at all because of economic constraints.
When households begin reassessing even deeply valued annual practices because of affordability concerns, it serves as a powerful reminder that economic challenges extend far beyond the price of petrol.
There is also a psychological dimension to affordability. Years of inflation have changed consumer behaviour. Families have become more cautious about spending. Businesses have delayed investments. Consumers increasingly prioritise necessities while postponing major purchases. Such behaviour reflects not only current economic conditions but also uncertainty about the future.
Pakistan’s dependence on imported petroleum products further complicates the situation. While recent declines in international crude oil prices have created room for domestic reductions, future volatility remains a constant possibility.
The writer is affiliated with the School of Management, Jiangsu University, Zhenjiang, Jiangsu P.R. China, and the Department of Agribusiness and Entrepreneurship Development, MNS-University of Agriculture, Multan, Pakistan.
Published in Dawn, The Business and Finance Weekly, June 1st, 2026