Business Recorder Editorials 10th September 2026

Petrol, HSD: Daily pricing adjustment

EDITORIAL: The government’s decision to adjust the price of petroleum and products on a daily basis from 18 July this year rather than on a weekly basis has merit given the daily, on some days hourly, fluctuations in their international price. This decision was taken subsequent to renewed hostilities in the Middle East that effectively constrains the number of oil tankers allowed to pass through the Strait of Hormuz to between 15 to one or two against over 140 to 150 per day pre-28 February.

In July, the government acknowledged it would impose fresh hardship on the general public, a hardship that would not only further undermine the quality of life of 42.4 percent of the population living under the poverty line Pakistan as per the World Bank in 2025 but also increase the number of those below the line. While the poverty line for Pakistan as determined by the World Bank estimated an income of 3.65 dollars per day, applicable to medium income countries, yet there is a growing concern that transport costs have severe repercussions on the price of perishable food items, and no doubt contributed significantly to food inflation estimated at 10.6 percent in July this year; in addition, rising petrol prices have compromised the capacity of those employed to reach their place of work (the government has calculated an unemployment rate of 8 to 9 percent though independent economists estimate it at 22 percent based on the Labour Force Survey carried by the Pakistan Bureau of Statistics) as well as raises the cost for those enrolled in educational institutions.

Critics, however, argue that the daily fluctuations in the prices do not reflect the cost of the purchase as that is secured in bulk and not on a daily basis. Be that as it may, the international prices of oil, futures and present, are changing daily, premised on statements by the US President (threats against Iran followed by claims of negotiations) and launch of actual hostilities in the Middle East.

The fact, however, remains that reliance on petroleum levy to the tune of 1.67 trillion rupees in the current year and placing it under Other Taxes that precludes sharing with provincial governments under the agreed National Finance Commission award, was agreed with the International Monetary Fund (IMF) under the ongoing programme. Additionally, in the Finance Act 2027, the government as per its commitment to the Fund under the Resilience and Sustainability Facility (1.6 billion dollars) raised the climate levy from 2.50 rupees per litre to 5 rupees per litre.

These revenue sources are critical to enabling the government to meet its commitments to the Fund, including the budget deficit, and these constitute an easy way to collect tax with petrol stations collecting it at the point of sale rather than the Federal Board of Revenue. This led to strike action by the All Pakistan Petrol Pump Association who agreed with the government’s proposal to increase the dealers’ commission from 8.64 rupees per litre to 9.98 rupees per litre – a rise that averted the threat of a nation-wide strike, though this would add to the price of the commodity at the pump.

Productive sectors have also expressed concerns that the daily adjustment to the prices of petrol and products, key inputs for most productive activities, has disabled them from projecting input costs that, in turn, impact on decisions relating to investment, current and future.

At present, the global economy is facing a recession and Pakistan is no exception. On the contrary, we face a more difficult situation, given the continued heavy reliance on foreign borrowing, including the 3 billion-dollar dual tranche Eurobond transaction – 1.75 billion dollars on a 5.5 year bond (at 7.5 percent) and 1.25 billion dollar on a 10 year bond (7.9 percent) – rates that are prohibitively high, a fragile economy with a decline in foreign investment and rising poverty levels. What this country require are out of the box solutions and a concerted effort to slash its own expenditures, particularly with respect to borrowing costs, and also enable it to reduce the application of multiple taxation on petroleum products that is eroding competitiveness of our productive sectors of the economy.

No time for climate complacency

EDITORIAL: The latest assessment by the Pakistan Meteorological Department (PMD), based on 45 years of climate data from 1981 to 2025, should serve as a wake-up call for our policymakers. Pakistan’s climate is changing significantly; but more importantly, it is becoming increasingly unpredictable and uneven across regions. The country is warming, with mean temperatures rising by 0.21°C per decade and minimum temperatures increasing even faster, by 0.26°C per decade. The faster rise in night-time temperatures is particularly concerning, as hotter nights leave the human body less able to recover from daytime heat and can increase health risks, especially for vulnerable communities.

The report also challenges the simplistic assumption that climate change merely means Pakistan is becoming drier. Although annual precipitation has declined

by about 7.40 millimetres per decade, the decrease is not statistically significant. The more worrying trend is that rainfall is becoming less dependable. Some regions are receiving substantially more monsoon rain, while northern areas have experienced declining precipitation in several seasons. The contrast between drought and deluge is striking. During the winter of 2024-25, for example, Pakistan recorded a national rainfall deficit of 67 percent. Yet only three years earlier, the 2022 monsoon brought rainfall as much as 450 percent above average in parts of the south, contributing to catastrophic floods that affected 33 million people and submerged roughly one-third of the country. Such extremes underscore the growing volatility of Pakistan’s hydroclimate.

This volatility has serious implications for agriculture and water security. Farmers depend on predictable rainfall and irrigation schedules, while changing temperatures and precipitation patterns can disrupt planting seasons, reduce yields and increase irrigation requirements. In the north, rising temperatures are accelerating snow and glacier melt, contributing to the formation and expansion of glacial lakes and increasing the risk of glacial lake outburst floods (GLOFs), while also altering the timing of river flows and potentially reducing water availability later in the year, when irrigation and hydropower needs remain high. At the same time, groundwater depletion is adding another layer of risk, particularly in already water-stressed areas. Yet water management remains largely focused on short-term shortages and post-disaster responses rather than long-term climate resilience.

Extreme heat is another growing threat. Some areas of southern Punjab, Sindh and western Baluchistan are already experiencing more than 100 days a year with temperatures above 40°C. Meanwhile, nights with minimum temperatures above 30°C are increasing rapidly in parts of Punjab, Sindh and Baluchistan. These conditions will place additional pressure on public health, electricity supplies, labour productivity and household incomes. The response cannot be limited to emergency relief after floods, droughts or heat waves. Pakistan urgently needs a comprehensive climate-adaptation strategy, backed by resources and, above all, political will. Climate risk must become part of mainstream economic planning rather than remaining the responsibility of environmental agencies alone. Every major road, housing scheme, agricultural project and water-management decision should be assessed against the climate Pakistan is likely to face in the coming decades—not the climate of the past.

The PMD has provided the evidence; policymakers must now provide the response. The country cannot control climate change on its own, but it can reduce its vulnerability to its consequences. The cost of adaptation may be substantial, but the cost of inaction—in lives, livelihoods, infrastructure and economic losses—will be far greater.