Oil shock keeps SPI in double digits

YoY inflation rises 11.92% amid US-Iran tensions; WoW index up 0.99%

KARACHI:

Pakistan's short-term inflationary pressure remained elevated, with the Sensitive Price Indicator (SPI) rising 11.92% year-on-year (YoY) in the week ended September 24, as the prolonged US-Iran conflict kept global oil prices at higher levels and added pressure to energy costs.

Brent crude briefly climbed above $106 a barrel before coming back to $103.64 this week amid uncertainty about the conflict and shipping traffic through the Strait of Hormuz.

According to data released by the Pakistan Bureau of Statistics (PBS), the combined SPI increased 0.99% week-on-week during the week under review, marking a further acceleration from the 10.64% YoY spike recorded in the preceding week.

The latest reading shows that the weekly inflation remained in double digits for the second consecutive week, after rising from 8.35% on September 3 to 8.62% on September 10, 10.64% on September 17 and 11.92% on September 24.

Energy prices remained among the major sources of inflationary pressure. LPG prices surged 63.97%, electricity charges for Q1 increased 58.59%, diesel prices rose 51.80% and petrol prices went up 47.49% than a year earlier.

Food prices also contributed significantly to the annual increase. Onion prices jumped 115.98%, wheat flour became 32.41% more expensive, powdered chilli rose 16.37%, mutton 15.75% and beef 13.22%. Fresh milk rates rose 8.10%, while plain bread was up 8.96% year-on-year.

On a weekly basis, however, the movement was mixed. Electricity charges for Q1 surged 18.76%, while egg prices rose 2.02%, garlic 1.57% and LPG 1.55%. These increases were partly offset by the decline in tomato prices by 13.45%, potatoes by 8.33%, diesel by 1.57% and petrol by 0.34%.

PBS data showed that prices of 20 out of 51 items increased, while 10 declined and 21 remained unchanged during the week.

The inflation burden was uneven across income groups. The highest expenditure quintile recorded a 12.31% YoY increase, compared with 9.69% for the lowest-income group, while the combined SPI rose 11.92%.

In August 2026, the monthly Consumer Price Index rose 11.1% YoY, compared with 9.2% in July and 3.1% in August 2025. On a month-on-month basis, inflation remained unchanged at 1.2%, compared with a 0.6% decline in August last year.

In urban areas, the CPI inflation increased 10.4% YoY in August, up from 8.7% in July and 3.5% in August 2025. On a month-on-month basis, the urban inflation rose 0.9%, compared with a 1.2% increase in the previous month and a 0.7% decline in August 2025.

In rural areas, inflation was higher, rising to 12.2% YoY in August from 9.9% in July and 2.5% in August 2025.