Pakistan's Inflation Surges Back into Double Digits Amid Fuel Costs and Food Shortages

Pakistan's inflation rate has surged back into double digits, reaching 11.2% in August, according to the Pakistan Bureau of Statistics (PBS). This marks a significant increase from July's rate of 9.4%, highlighting renewed pressure on households due to higher fuel costs and food shortages.

The government's policy of fully passing international fuel costs onto consumers has contributed to the inflation surge, with taxes amounting to PKR 116 per litre on petrol and PKR 101 on high-speed diesel. Petrol prices were around 25% higher than a year earlier, driving up transport inflation by 20.2%.

Food prices have also emerged as 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, raising questions about provincial management. Despite official claims that Pakistan produced 29.7 million tonnes of wheat this year, the worsening wheat situation has led to raids against hoarding in an attempt to prevent further increases in essential food prices.