Petrol at PKR 321, schools shut, salary cuts: How Iran war is hitting Pakistan hard while India holds the line

People wait for their turn to get fuel at a petrol station, amid the U.S. and Israeli conflict in Iran, in Karachi, Pakistan March 6, 2026. REUTERS/Akhtar Soomro

The Iran war has caused a sharp rise in global oil prices, pushing Pakistan into a fuel crisis with steep price hikes, panic buying, and emergency austerity measures. India remains insulated due to stronger energy management and diversified supply chains.

Did our AI summary help?

The war in West Asia has begun to ripple far beyond the battlefield, and few countries are feeling the shock as sharply as Pakistan. Already grappling with weak finances, heavy imports and persistent inflation, Islamabad now faces a fresh crisis as disruptions in oil and gas supplies push fuel prices sharply higher. The government has scrambled to impose austerity measures, including work-from-home orders, school closures, and salary cuts for ministers, in an attempt to conserve fuel.

While Pakistan struggles to manage rising energy costs and public panic, India has remained relatively insulated from the immediate price shock thanks to stronger energy management and a more diversified supply strategy. Here is a closer look at how the Iran war has pushed Pakistan into a fuel crisis and what it reveals about the fragile state of its economy.

Why the Iran war is hitting Pakistan hard

Pakistan depends heavily on imported oil and gas to run its economy. With global oil prices rising sharply following the United States and Israel’s war against Iran, countries dependent on imports have been forced to adjust quickly.

For Pakistan, which already runs a fragile balance of payments and limited foreign exchange reserves, the sudden surge in prices has triggered a serious economic strain.

Reports indicate that the country’s monthly oil import bill could rise to nearly 600 million dollars due to the conflict and resulting supply disruptions. This comes at a time when Pakistan is already dealing with economic instability, inflation and debt pressures.

Unlike stronger regional economies, Pakistan has limited financial room to absorb such shocks. The result has been immediate price hikes, emergency government measures and public anxiety.

Fuel prices in Pakistan have surged

The most visible impact of the crisis has been a sharp jump in fuel prices. Last Friday, March 6, the Pakistani government announced a Rs 55 per litre increase in petrol and high speed diesel prices.

As a result:

• Petrol now costs Rs 321.17 per litre
• High-speed diesel costs Rs 335.86 per litre

Previously petrol was priced at Rs 266.17 per litre, meaning the increase represents about a 17 per cent jump. It is one of the steepest increases in recent years.

Cooking fuel has also become expensive. As of Saturday, the price of a 14.2 kilogram Liquefied Petroleum Gas cylinder in Pakistan stood at around Rs 1,046.

Pakistan’s Petroleum Minister Ali Pervez Malik attempted to reassure the public, saying the country currently has enough fuel stock to last 28 days, adding that three oil tankers carrying additional supplies are expected to arrive soon.

Pakistan saw the steepest fuel price rise

Comparative data shows Pakistan has experienced the largest petrol price increase among several countries following the global oil shock.

Deputy Prime Minister Ishaq Dar admitted the government had little choice but to pass the burden to consumers.

He said Islamabad had “little choice” but to pass on the impact of global oil price increases.

According to figures shared by Khurram Shehzad, adviser to Pakistan’s federal finance minister, petrol prices rose from $0.95 per litre before the war to $1.15 per litre afterward, a rise of more than 21 per cent.

Other regional countries saw much smaller increases:

• Nepal: $1.40 to $1.43 per litre
• Bangladesh: $1.14 to $1.18 per litre
• Sri Lanka: $1.22 to $1.23 per litre

India, in contrast, has so far seen little impact on fuel prices despite the global turmoil.

As of March 11:

• Petrol costs Rs 94.77 in Delhi
• Rs 103.5 in Mumbai
• Rs 105.45 in Kolkata

The contrast highlights how stronger economic buffers and diversified supply chains have helped India avoid immediate price shocks.

Panic buying and rising costs

The sudden price surge triggered panic among Pakistani consumers.

In major cities including Karachi, Lahore and Islamabad, hundreds of people rushed to petrol pumps to fill their tanks, forming long queues amid fears of shortages.

Prime Minister Shehbaz Sharif warned against hoarding and urged citizens to conserve fuel.

The rising fuel costs have also begun to affect other sectors.

Air travel in Pakistan has become more expensive. Domestic ticket prices have increased by PKR 2,800 to PKR 5,000. Tickets that earlier cost PKR 10,000 to PKR 15,000 are now priced between PKR 17,000 and PKR 20,000.

Economists warn that higher fuel prices will likely push up transportation costs, food prices and electricity bills, worsening inflation in a country already struggling with rising living costs.

Emergency austerity measures announced

Facing the prospect of a prolonged crisis, the Pakistani government has introduced several austerity measures aimed at conserving fuel.

Prime Minister Shehbaz Sharif said the measures were necessary because “The entire region is currently in a state of war.”

Key steps include:

• A four-day workweek for government employees
• 50 per cent of government staff working from home on a rotating basis
• Requests for private companies to adopt similar work-from-home policies

Political leaders and officials have also been asked to share the burden.

• Federal and provincial cabinet members will forego salaries and allowances for two months
• Salaries of federal and provincial legislators will be cut by 25 per cent
• Foreign travel for officials will be allowed only for essential purposes and in economy class

Educational institutions have also been affected. Schools have been shut and college classes have shifted online.

Authorities have even asked citizens to limit social events. Weddings and parties are now capped at 200 guests with only one main dish allowed.

Public reaction: Mockery and frustration

The austerity measures triggered widespread reactions on social media, with many Pakistanis expressing frustration.

One user wrote on X, “Imagine a beggar nation can’t survive one week into a war happening outside the country. Now imagine a war in their own country.”

Another mocked the closure of schools, writing, “Two weeks of vacation to solve an oil crisis? Someone tell the PM that turning off the school lights won’t refill the tanks.”

A third comment read, “Sab to bandh kar diya, chacha.”

The reactions reflect growing public anxiety over the government’s handling of the crisis and the broader fragility of Pakistan’s economy.

A crisis that highlights Pakistan’s economic vulnerability

The current fuel shock underscores how exposed Pakistan remains to global energy disruptions.

Heavy dependence on imports, weak financial reserves and chronic economic instability mean even external crises quickly translate into domestic emergencies.

India, meanwhile, has largely avoided immediate price spikes despite the same global oil shock, reflecting stronger economic resilience and more stable energy management.

As the West Asia war continues, Pakistan faces a difficult question. Whether it can weather the crisis on its own or will once again be forced to seek external financial assistance remains uncertain.