Pakistan's government announced it will provide free public transportation in the capital and major regions for one month after fuel prices surged sharply in the wake of the Iran war.
On Wednesday, according to Hong Kong's South China Morning Post (SCMP), Pakistani authorities recently raised gasoline prices by 42.7% to 485 rupees ($1.70) per liter. Protests erupted across the country immediately after the sudden hike, with long lines of motorcycles forming at gas stations as chaos spread.
In Lahore, Punjab province, dozens of people took to the streets the previous day demanding the price increase be reversed. Protesters said "the government dropped a 'gasoline bomb' overnight," appealing over the strain on their livelihoods. Some pushed back, claiming the hike was driven not by the war but by pressure from the International Monetary Fund (IMF).
As public sentiment deteriorated rapidly, Prime Minister Shehbaz Sharif quickly reversed course. In a televised address, he said the government would lower the gasoline tax and readjust the price to 378 rupees per liter. He stressed the reduction would remain in place for at least one month.
However, diesel was excluded from the price cut. Diesel remains at around 520 rupees per liter after a 54.9% increase, keeping transportation and logistics cost burdens high.
As an additional measure, the government introduced a free public transit policy. Interior Minister Mohsin Naqvi said "all public transportation in Islamabad will be provided free of charge for 30 days." Approximately 350 million rupees in fiscal resources will be allocated to the measure.
Punjab province also decided to fully waive fares on state-run public transportation and provide selective subsidies for trucks and buses. Sindh province prepared separate support measures targeting motorcycle riders and small-scale farmers.
Pakistan's government had previously implemented austerity measures to conserve fuel, including introducing a four-day workweek for public institutions, extending school holidays, and shifting some classes online. The government explained that it had already raised fuel prices by 20% in early March but had restrained further increases.
The crisis stems from a spike in global oil prices triggered by the Iran war. Rising tensions in the Middle East disrupted energy shipments through the Strait of Hormuz, deepening global supply concerns.
The impact is not limited to Pakistan. Bangladesh also recently raised prices of cooking LPG and vehicle CNG by approximately 29%, as the shock spreads across Asia.
Meanwhile, the IMF announced on May 28 that it had reached a preliminary agreement on a new $1.2 billion support program for Pakistan. The IMF warned that rising energy prices and supply chain instability are exerting a double squeeze on vulnerable economies.