Pakistan Now Ranks Worst in South Asia for Petrol Prices Relative to Income

Although fuel prices across South Asia remain relatively similar in US dollar terms, Pakistan faces the highest fuel burden in the region when measured against per capita income, based on the latest World Bank GDP per capita data.

Petrol prices in Pakistan ($1.41 per litre), India ($1.10 per litre), Bangladesh ($1.05 per litre), and Sri Lanka ($1.40 per litre) generally fall within a comparable range. These prices fluctuate depending on global oil trends, government taxes, and currency exchange rates.

However, the real difference becomes clear when fuel costs are compared with average income levels. Pakistan’s per capita income stands at approximately $1,400–$1,600, which is significantly lower than India ($2,600–$2,700), Bangladesh ($2,500–$2,600), and Sri Lanka ($4,500+).

As a result, despite having fuel prices similar to neighboring countries, Pakistan remains the least affordable country in South Asia for fuel, placing greater financial pressure on its citizens.

As of the end of 2025, Pakistan has the lowest per capita income among major South Asian economies, making fuel costs significantly harder to absorb for ordinary consumers.

In comparison, India and Bangladesh maintain relatively higher per capita incomes, which provide their citizens with better protection against fuel price fluctuations.

Meanwhile, Sri Lanka currently reports the highest per capita income among these four countries, giving it comparatively stronger fuel affordability. This marks a notable recovery for a country that declared a sovereign debt default in April 2022.

In Pakistan, lower income levels mean that petrol and diesel expenses consume a much larger portion of household earnings than in neighboring countries. As a result, the country remains more vulnerable to global oil price shocks, currency depreciation, and rising domestic costs.

The calculations below are based on an exchange rate of approximately PKR 278 per US dollar. Fuel prices in other countries have been rounded for comparison, as rates often vary by region, city, and local tax policies.

For example, petrol may cost around ₹94 per litre in New Delhi, while prices can exceed ₹100–110 per litre in cities such as Mumbai and Hyderabad.

The real issue is not just the absolute price of fuel, but the relationship between income levels and energy costs. While petrol prices across South Asia remain relatively similar in dollar terms, the affordability gap becomes much clearer when those prices are compared with average incomes.

The dollar cost of fuel may appear nearly identical across countries, but the economic reality is very different—especially for Pakistan. With lower per capita income and weaker purchasing power, Pakistani households spend a significantly larger portion of their earnings on fuel compared to consumers in neighboring countries.

This imbalance makes Pakistan far more vulnerable to global oil price increases, currency depreciation, inflation, and rising transportation costs. In simple terms, the issue is not only how much fuel costs at the pump—it’s how much of a person’s income is required to afford it. That’s where Pakistan faces the greatest challenge in South Asia.

On Friday, Pakistan raised petrol prices by Rs. 26.77 per litre, pushing the new rate to Rs. 393.35 per litre, while diesel prices increased to Rs. 380.19 per litre.

This sharp increase further highlights Pakistan’s growing fuel affordability crisis. In a country where income growth remains slow and purchasing power continues to weaken, rising fuel costs place an even heavier burden on households and businesses.

Higher fuel prices often trigger a ripple effect across the economy by increasing transportation costs, food prices, and overall inflation. Unless wage growth and broader economic conditions improve, fuel-related inflationary pressure is likely to remain significantly higher for Pakistani consumers compared to their regional counterparts.