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When the government reduced fuel prices in Pakistan by Rs. 80 to Rs. 378.41 per liter on April 3 and termed it an exceptional relief, the math still does not add up for the working class, who are still paying 43% more for fuel than they were just five weeks ago. The question is simple: Is there a way to bring sustainable relief to them?

Pakistan’s fuel price crisis is not an isolated policy failure; it is one symptom of the middle power trap, where a state organized around managing dependency has no fiscal buffer when external shocks arrive.

On April 2, 2026, the federal government raised petrol to Rs. 458.41 per liter and diesel to Rs. 520.35 per liter, following a global price surge. But under public pressure, the government on April 3, 2026, slashed the Petroleum Development Levy (PDL) by Rs. 80 and brought petrol down to Rs. 378.41.

However, the price remains 43% higher than it was five weeks ago, due to the ‘largest supply disruption’ in the history of the global fuel market, as declared by the International Energy Agency report.

Miftah Ismail, former Finance Minister and Awaam Pakistan Party leader, criticized PM Shehbaz’s policy flip-flops, saying a Rs. 138 petrol hike to Rs. 458/litre on April 2 followed by a 24-hour U-turn that cut the PDL and reduced the price to Rs. 378, thanking God for small mercies.

Who Is The Actual Sufferer of Fuel Prices 2026

The World Bank publication stated that roughly 25% of the population in Pakistan lives below the poverty line. But the more relevant benchmark for understanding middle-class distress is the World Bank’s lower-middle-income threshold: $4.20 per person per day, or approximately Rs. 1,170. A household earning Rs. 3,000 to Rs. 5,000 daily, considered solidly middle-income, is already in survival mode when transportation expenses, utility charges, and groceries alone consume the majority of that income.

The impact of the fuel price hike on gig economy workers is direct. Bykea, Pakistan’s largest domestic bike-hailing and delivery platform, has over 500,000 registered driver partners across its operational cities. Factor in InDrive and Yango, both of which are running bike-hailing, delivery, and four-wheeler services. The population of ride-hailing workers is conservatively in the hundreds of thousands.

A rickshaw driver or motorcycle rider now pays 43% more in fuel costs to maintain a household, while higher prices are already suppressing ride and delivery demand. The equation is simple: pay more – earn less.

Even at the revised Rs. 378.41, the monthly fuel bill, assuming earnings of Rs. 2,000 per day and a daily consumption of two liters, sits at approximately Rs. 22,700, leaving approximately Rs. 37000 for other expenses, including rent, food, school fees, etc.

For the daily-wage factory worker commuting across Karachi on three diesel-driven bus routes, a fare increase is not an inconvenience. It is a choice between eating and showing up.

The Alternatives: What the Government Could Still Do

The government is operating under an IMF program that limits fiscal maneuver. But Adnan Mufti, Partner, Moore Shekha Mufti, argues that one option remains both viable and largely unexplored: a Special Levy on Luxury Vehicle Fuel.

The precedent was set on March 22, when Prime Minister Shehbaz Sharif announced the imposition of a Rs. 200 levy on high-octane fuel. The principle, Mufti said, was correct, but the execution was far too narrow.

“High-octane consumers are small in number,” Mufti said. “The far larger opportunity lies in vehicles above 1,500cc engine capacity, including SUVs, sedans, double-cabin pickups that run on regular petrol. These vehicle owners can easily absorb a special levy of Rs. 30 to Rs. 50 per litre. The revenue potential is significant,” Mufti said, estimating this broader levy would generate more than Rs. 9 billion, projected revenue from the high-octane revenue measure.

A Proposed Framework to Impose The Levy

Targeted Assessment: The levy applies exclusively to vehicles with an engine capacity over 1,500cc (including SUVs, sedans, and double-cabin pickups).

Fixed Monthly Quota: The tax is calculated as a fixed monthly levy based on a standard 50 liters of petrol consumption.

Automated Billing: Provincial excise authorities, working with traffic police, issue an automated e-ticket to the vehicle owner every month.

Strict Enforcement: The system operates under the same conditions as e-challans, ensuring compliance until the economic crisis stabilizes.

The result would allow the government to reduce overall petrol prices by up to Rs. 50 per liter with no net revenue loss and no requirement for a general subsidy, a measure fully within IMF program parameters, Mufti said.

He also urged the provincial governments to introduce free public transport services on the same model as Islamabad to ease the financial burden on the working class. The options exist. The question is whether the government has the will to use them.

Pakistan’s inability to deploy targeted fiscal tools under IMF constraints is itself a symptom of the structural dependency that has left the state with no fiscal buffer when external shocks arrive, a pattern examined in full here.

Read more analysis in our Middle Power Trap section.