Pakistan's Inflation Rate Soars to 11.2% Amid Fuel Tax Policy and Wheat Shortages

Pakistan's inflation rate surged to 11.2% in August, surpassing double digits for the first time since July. According to The Express Tribune, this increase is attributed to the government's policy of fully passing international fuel costs and multiple taxes onto consumers.

The combined burden of petroleum levy, carbon levy, and customs duty on petrol and high-speed diesel contributed significantly to transport inflation, which rose 20.2% year-over-year. Diesel prices in dollar terms were the highest in South Asia, while petrol ranked second after Bangladesh.

Food prices have also become a major concern, with urban food inflation reaching 12.1% and rural food inflation standing at 13.2%. Tomato prices soared 128% year-on-year, onions rose 125%, wheat prices increased 87%, and wheat flour became 73% more expensive.

The federal government has decided to import up to one million tonnes of wheat after Sindh and Punjab failed to meet procurement targets. Raids against hoarding have failed to prevent further increases in essential food prices.