Fuel hikes push SPI into double digits

Inflation jumps 10.64% YoY; weekly index up 0.49% on expensive energy, food

KARACHI:

The year-on-year inflation measured by the Sensitive Price Indicator (SPI) surged back into double digits, reaching 10.64% in the week ended September 17, as the fallout from the Middle East situation pushed up fuel prices and added to pressure on household budgets.

The latest increase marked a sharp acceleration from the 8.62% year-on-year rise recorded in the preceding week and the 8.35% increase two weeks earlier, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday. The SPI tracks prices of 51 essential commodities across 50 markets in 17 cities.

The weekly reading rose 0.49%, reflecting fresh increases in petroleum products and other essential items. Diesel prices increased 7.29% over the week, while petrol became 6.40% more expensive and liquefied petroleum gas (LPG) prices rose 3.26%.

The increase in fuel prices comes amid heightened uncertainty in the Middle East, with regional tensions raising concerns over energy supplies and transportation costs. The PBS data, however, reports price movements and does not independently attribute them to the regional situation.

The year-on-year data showed that energy-related items were among the main drivers of the renewed inflationary pressure. LPG prices were 60.42% higher than a year earlier, diesel prices increased 54.21% and petrol prices rose 48%. Electricity charges for the first quarter were 33.54% higher.

Food prices added to the burden, particularly for households reliant on basic staples. Onion prices more than doubled, rising 117.77% year-on-year, while wheat flour became 33.27% more expensive. Prices of powdered chilli, mutton and beef increased 16.37%, 15.86% and 12.88%, respectively.

Several food items, however, recorded annual declines. Potato prices fell 35.31%, sugar 20.95%, eggs 19.31% and chicken 15.26%. Prices of gram, masoor and moong pulses declined 12.42%, 11.26% and 8.49%, respectively.

The impact of inflation varied across income groups. The highest expenditure group recorded the steepest year-on-year increase of 11.13%, compared with 8.79% for the lowest expenditure group. The second, third and fourth groups registered increases of 9.91%, 8.86% and 9.37%, respectively.

During the week, prices of 19 items increased, nine declined and 23 remained unchanged. The latest reading suggests that the recent easing in weekly inflation has been interrupted, with fuel and selected food items contributing to renewed pressure on consumers.

The monthly Consumer Price Index (CPI)-based inflation increased 11.1% year-on-year in August 2026 as compared to an increase of 9.2% in the previous month and 3.1% in August 2025. On a month-on-month basis, it remained unchanged at 1.2% in August 2026 as compared to the previous month and stood higher against a decrease of 0.6% in August 2025.