Jet fuel price in Pakistan has risen 150% since March 1.
- Kerosene price rose 127% in the same period, now at Rs 429 per liter
- Domestic tickets are up Rs10,000 to Rs15,000. International tickets also rose significantly.
- The government may unfreeze petrol and diesel prices soon.
The Gulf War has disrupted global oil supply, and fuel prices in Pakistan have risen sharply. Petrol and diesel increased by Rs 55 per liter. The government then froze those prices and spent Rs69 billion in subsidies to hold them steady.
But two other fuel types kept rising, with no formal announcement made to the public.
- Jet fuel, also called JP-1, rose by Rs84 to Rs472 per liter from March 21. JP-1 is the fuel that powers airplanes.
- Kerosene, the fuel used in cooking stoves and lamps across many Pakistani homes, also rose by Rs71 to Rs429 per liter within a single week.
What This Means for Air Travel
Fuel makes up 30 to 40% of an airline’s operating costs. When fuel prices in Pakistan rise like this, airlines pass the burden on to passengers.
Domestic airfares have already gone up by Rs10,000 to Rs15,000. International fares have increased by Rs30,000 to Rs40,000.
The Pakistan Fruit and Vegetable Exporters Association has also raised concerns that ground handling companies imposed an additional charge of Rs50 per kilogram on air shipments. Fruit and vegetable exports via air have already been affected.
How Long Can the Government Hold Fuel Prices?
Petroleum stock levels remain stable, and supply chains are functioning, according to officials. However, keeping fuel prices Pakistan frozen is becoming costly for the government.
The government is currently absorbing Rs175 per litre on diesel and Rs75 per litre on petrol to keep prices stable.
Unlike regular fuel, high octane fuel price in Pakistan was not frozen. High-octane fuel, used in luxury and high-performance vehicles, already had its levy tripled earlier this month from Rs105 to Rs305 per liter, bringing it to Rs535 per liter.
Instead of keeping petrol prices frozen for everyone, the government is considering giving specific discounts only to people with two- and three-wheelers, since they would feel the hit of a price hike the most.
