Karachi (Commerce Desk): Renewed tensions in the Middle East are creating fresh waves of uncertainty and volatility in global oil prices. Although the conflict is external, its effects are being directly felt on Pakistan’s economy.
Experts have described rising oil prices as a “petrol bomb,” warning that it could strain fiscal balances and put additional pressure on the country’s external accounts. Following the petroleum levy revision on March 7, 2026, the levy on petrol has exceeded Rs 100 per liter.
The increase in oil prices is expected to widen the trade deficit, with an estimated rise of around $60 million in the monthly import bill, potentially worsening the current account deficit. The State Bank of Pakistan, which had previously projected keeping the current account deficit below 1% of GDP, may revise its forecast in light of inflationary pressures and external account risks.
Indirect effects of higher oil prices, including increased costs of food and transportation, are also likely to push inflation higher.
