Energy crisis deepens in Pakistan amid Iran war as Islamabad announces free public transport for 30 days

Pakistan: The state-run public transport in Islamabad and its most populous province will be free for the next month, officials said on Friday after the government sharply increased fuel prices due to rising global energy costs linked to the Iran war.

The move follows a late-night decision to raise petrol prices by 42.7 percent and diesel by 54.9 percent, which triggered several street protests, according to AFP. Long lines of motorbikes were also reported at fuel stations as people rushed to fill up.

Interior minister Mohsin Naqvi took to X and said, “All public transport in Islamabad will be made free of cost for the general public for the next 30 days, starting tomorrow (Saturday)."

He added that the government would incur a cost of 350 million rupees (about $1.25 million) for the measure.

In Punjab, Pakistan’s most populous province, the chief minister also waived fares on state-run public transport and introduced targeted subsidies for trucks and buses.

Maryam Nawaz Sharif urged transport operators not to pass the increased costs on to passengers and consumers, stating, “We promise to relieve the public of economic burden as soon as conditions improve.”

Meanwhile, in Sindh, the provincial government in Karachi announced similar subsidy measures for motorcyclists and small-scale farmers.

The government has introduced a series of austerity measures to conserve fuel, including shifting many government offices to a four-day work week, extending school holidays, and moving certain classes online.

Pakistan is considered a lower-middle-income country, with about 25% of its 240 million people living below the poverty line, according to World Bank data. The government raised fuel prices by 20% in early March but had resisted additional increases for weeks, claiming it could absorb higher costs without passing them on to the public.

"The government, overnight, has dropped a 'petrol bomb' on its people," AFP quoted Naveed Ahmed, a 39-year-old protestor, as saying, adding, “Our nation cannot bear this situation right now. This storm of inflation must be stopped, and relief should be provided to the public."

Another protester in Lahore, Hafiz Abdul Rauf, stated, "The rise we are seeing is not due to the (Iran) war, but to pressure from the IMF, pressure that must be resisted. For God's sake, step back from these demands and show some compassion for the people."

Bangladesh on Thursday increased the cost of Liquefied Petroleum Gas (LPG) used for cooking and compressed natural gas used in some vehicles by 29%. Earlier this week, the International Monetary Fund cautioned that vulnerable economies like Pakistan are facing not only rising energy costs but also disruptions in supply chains.

On March 28, the IMF announced that it had reached an initial agreement with Pakistan to release a new $1.2-billion support package under its ongoing aid programs for the country.

The US-Israel conflict against Iran, which began on February 28, has ignited widespread conflict in the Middle East, with Iranian retaliatory attacks striking targets throughout the Gulf and effectively halting shipping in the Strait of Hormuz. This crucial waterway typically handles around one-fifth of the world’s energy shipments, much of it destined for Asia.

(With inputs from AFP)