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Pakistan's inflation surges as fuel taxes, wheat failures push prices to 11.2%

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Asia | September 2, 2026 2:59:44 PM IST
Islamabad [Pakistan] September 2 (ANI) Pakistan's inflation rate jumped back into double digits in August, reaching 11.2 per cent, only a month after falling below the 10 per cent mark. The figures highlight renewed pressure on households as higher fuel costs, food shortages and government taxation drive up the cost of living. Pakistan Bureau of Statistics (PBS) recorded the sharp increase in Consumer Price Index (CPI) inflation across both urban and rural areas, as reported by The Express Tribune.

According to The Express Tribune, the acceleration has been linked to the government's policy of fully passing international fuel costs and multiple taxes onto consumers, while provincial authorities have struggled to maintain adequate wheat supplies. Petrol was being charged with a combined burden of petroleum levy, carbon levy and customs duty, with taxes amounting to PKR 116 per litre on petrol and PKR 101 on high-speed diesel. Motor fuel prices were around 25 per cent higher than a year earlier, contributing significantly to transport inflation, which surged 20.2 per cent. Research by Tola Associates found that diesel prices in dollar terms were the highest in South Asia, while petrol ranked second after Bangladesh.

Food prices have emerged as another major source of concern. Urban food inflation reached 12.1 per cent, while rural food inflation stood at 13.2 per cent. Tomato prices soared 128 per cent year-on-year, onions rose 125 per cent, wheat prices increased 87 per cent, and wheat flour became 73 per cent more expensive. Milk products were also nearly 10 per cent costlier. The worsening wheat situation has raised questions about provincial management despite official claims that Pakistan produced 29.7 million tonnes of wheat this year, as cited by The Express Tribune.

The federal government has now decided to import up to one million tonnes after Sindh and Punjab failed to meet procurement targets. Raids against hoarding have failed to prevent further increases in essential food prices. Meanwhile, non-food inflation rose to 9.4 per cent in urban areas and 11.3 per cent in rural areas, while core inflation climbed to between 8.5 per cent and 8.8 per cent, as reported by The Express Tribune. (ANI)

 
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