Taxes fuel unprecedented price hikes in FY25

Additional 20-40% increase in prices is anticipated due to new taxes in FY26 budget

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RAWALPINDI:

The outgoing fiscal year 2024-25 witnessed an unprecedented surge in the prices of building materials, food and essential goods, primarily driven by increased taxes. The rising cost of building materials and labour inflated the price of a new 5-marla house by Rs1 million to Rs1.5m.

On the first day of this ending financial year, July 1, 2024, iron bar cost Rs220 per kg, but today its costs Rs260 per kg, a cement bag cost Rs1150, but today it costs Rs1450, a gravel trolley was priced at Rs11,500, today it costs Rs 15,000, while sand's rate was Rs9,000 per trolley, today it is Rs11,000 per trolley.

Similarly, milk was being sold at Rs200 per kg on July 1, 2024, but today it costs Rs220 per kg, butter (Rs220, Rs240), chicken (Rs300 per kg, Rs415 per kg), eggs (Rs240 per dozen, Rs 315 per dozen), mutton (Rs2,000 per kg, Rs2,400), beef (Rs1,200 per kg, Rs1,400), tea leaves (Rs1,600 per kg, Rs2,000), a cup of tea (Rs50, Rs 80), sugar (Rs150 per kg, Rs190), flour (Rs100, Rs110), ghee (Rs500, Rs550), oil packet (Rs530, Rs580), rice (Rs300 per kg to Rs 400), white gram (Rs390 per kg to Rs480), black gram (Rs360 per kg, Rs 390), daal gram (Rs290 per kg to Rs360 today), daal mash (Rs490 per kg to Rs540 today), daal moong (Rs340 per kg to Rs400 today), daal masoor (Rs330 per kg to Rs370 today), gram flour (Rs290 per kg to Rs390 today), flour (Rs145 per kg to Rs155 today), salt (Rs60 to Rs80 per packet today), roti (Rs14 to roti Rs 14), naan (Rs25 to Rs30 today), oily naan paratha (Rs40 to Rs50 today).

Onion (Rs50 per kg to Rs60 today), potato (Rs40 per kg to Rs60 today), green coriander (Rs30 to Rs60 today), tomatoes (Rs50 per kg to Rs80 today), garlic (Rs200 per kg to Rs 300 today), ginger (Rs400 per kg to Rs500 today), lemon (Rs350/400 per kg to Rs800 today), apple (Rs200 per kg to Rs300/350 today), banana (Rs100/150 per dozen to Rs200/250 today), guava (Rs150 per kg to Rs250/300 today), mango (Rs200 per kg Rs300 today), melon (Rs80 per kg to Rs100 today), watermelon (Rs30 per kg to Rs70 today, garma (Rs100 per kg to Rs110 today), pomegranate (Rs300 per kg to Rs450 today), and peach (Rs150 per kg to Rs300 today).

These prices are current as of June 10, 2025. Following the upcoming budget for the fiscal year 2025-26, an additional 20% to 40% increase in prices is anticipated due to new taxes.

This budget-related uncertainty has already led to a significant shortage of supply in the open market, with several items, including cigarettes, being sold on the black market.

All national and international companies have suspended the supply of their products for the past three weeks in anticipation of the budget.

New prices for food and essential goods will be set after the general sales tax and other new taxes are implemented.

Interestingly, carbonated drink bottles, which cost 270 on July 1, 2024, are currently being sold for Rs200. However, a new and devastating wave of inflation is expected after the budget announcement.