Iran closed the Strait of Hormuz following airstrikes by the United States and Israel, sparking a global oil crisis.
Prime Minister Shehbaz Sharif is expected to reassure the nation soon about the overall situation amid the ongoing crisis in the Middle East, following the US and Israeli attacks on Iran.
Tensions in the Middle East rose last week after US and Israeli airstrikes killed Iran’s supreme leader, Ayatollah Ali Khamenei, along with several senior officials, prompting retaliatory strikes from Tehran and widening the regional conflict. In response, Iran attacked US military bases in several Gulf countries, significantly escalating the confrontation.
Iran also closed the Strait of Hormuz following airstrikes by the United States and Israel, stopping the movement of oil supplies to many countries. As a result, crude oil prices on Friday posted their biggest weekly gain since extreme volatility during the COVID-19 pandemic in spring 2020, when shipping and energy exports through the key waterway were disrupted.
A day earlier, Prime Minister Shehbaz reviewed multiple proposals and recommendations to implement austerity and prudent spending. He highlighted the importance of the timely implementation of measures to protect the national economy.
“The government is closely monitoring the situation and will take all necessary decisions to ensure economic stability,” he said, pledging that all possible measures would be taken to protect public interests during this difficult period.
He emphasized prudent management of national resources and assured that once the situation improves, the government will provide further relief to the public. The statement clarified that the austerity measures would not affect the industrial or agricultural sectors, ensuring that production, exports and food security remain intact.
“Everyone should fairly bear the burden of savings and austerity. The privileged sections of society and the elite classes should set an example by making necessary adjustments,” the prime minister had said.
The government sharply increased diesel and gasoline prices by 55 rupees per liter, or 20%, on Friday, marking the first of a series of similar increases expected in the coming days due to the ongoing conflict.
The increase in gasoline prices was greater than the increase in international markets, as the government decided to raise more money than necessary from motorcyclists and car owners to subsidize the use of diesel, mainly in the public transport and agriculture sectors.
Read more: The government launches a “fuel bomb”
The sharp rise has intensified the cost of living, with residents reporting higher transportation fares and rising prices for everyday items.
People also reported disputes at gasoline pumps, where employees refused to dispense fuel worth less than a liter. According to residents, many customers asked for petrol worth Rs 150 or Rs 200, but the pump staff refused, saying that the speed of the nozzle is fixed and the fuel is dispensed in larger or smaller quantities, leading to frequent arguments.
Rising oil prices also raised the cost of fruits, vegetables and other daily necessities. Traders said the transportation cost to bring fruits, vegetables and produce was earlier around Rs 1,000 per trip, but now it had increased to between Rs 2,500 and Rs 3,000.
Drivers providing pick-up and delivery services for schoolchildren have also increased their rates, and residents say the entire burden has fallen on the public.
