Inflation likely to surge again as rising oil prices push costs up

ISLAMABAD: Pakistan’s inflation is expected to rise again from April, as increasing global oil prices begin to impact fuel, transport, and electricity costs, reversing the recent trend of easing price pressures.

Early estimates suggest inflation could climb close to double digits, with analysts projecting April figures near 10 percent, compared to March inflation likely settling around the higher range of approximately 7 percent.

Economists attribute the expected surge primarily to rising international oil prices, which have already translated into higher domestic fuel rates. Despite government efforts to cushion the impact through partial subsidies, fuel prices recorded a notable increase in March, pushing up transport fares and delivery costs.

Experts note that fuel and transport have been key drivers of the recent uptick, as higher logistics costs quickly spill over into the prices of essential goods across the country.

Electricity tariffs have further added to the burden, with recent fuel cost adjustments increasing per-unit charges and expanding the impact to a broader group of consumers. The rise in energy costs has not only strained household budgets but also increased operational expenses for businesses, which may pass on the additional costs to consumers.

Analysts say the current trend reflects a shift toward cost-push inflation, driven by rising input and energy costs rather than just food prices, making it more difficult to control.

Focus is now on the upcoming Monetary Policy Committee meeting of the State Bank of Pakistan scheduled for April 27. The central bank had previously maintained the policy rate, but growing inflationary pressures may prompt a reassessment in the coming weeks.