Air travel to become more expensive in Pakistan after another jet fuel price hike

2026-03-23 - 13:10

ISLAMABAD – Air travel, which is already expensive for many passengers, is set to become even costlier as rising jet fuel prices continue to climb amid ongoing Iran–Israel conflict. The latest increase in fuel costs is expected to put additional pressure on airlines, potentially leading to higher ticket prices in the near future. In dramatic escalation of global economic pressure triggered by the ongoing Iran–Israel conflict, the ripple effects are now being felt far beyond the battlefield, sending shockwaves through energy markets, aviation sectors, and national economies. Iran–Israel war, now stretching into its 24th day with no visible path to resolution, intensified fears across international markets. The continued disruption and reported closure of the Strait of Hormuz which is a critical global oil and fuel transit route, has severely constricted the supply of jet fuel worldwide. Pakistan’s aviation industry is among the latest casualties of this geopolitical crisis. Jet fuel prices in the country have surged by Rs46 per liter, pushing the cost of jet fuel for Airbus and Boeing aircraft to a staggering Rs388 per liter. Industry insiders warn that this sudden spike is likely to translate into increased airline ticket prices, putting additional financial pressure on passengers already grappling with inflation. The crisis is not new, but it is worsening. Since March 1, jet fuel prices in Pakistan increased by a total of Rs200 per liter, rising sharply from 188 at the onset of the conflict. Analysts suggest that continued instability in the region could drive prices even higher in the coming weeks. Pakistani government has taken a bold fiscal step targeting luxury fuel consumption. A high-level meeting chaired by Prime Minister Shehbaz Sharif—held via video link—approved a significant increase in the levy on high-octane fuel used by luxury vehicles. Under the new policy, the levy on high-octane fuel has been increased by 200 rupees per liter. The total levy now stands at 300 rupees per liter, up from the previous 100. The levy on high-octane fuel is now approximately 305.37 per liter while price of HOBC (High Octane Blended Component) has risen to Rs535. PM Shehbaz bans use of high octane fuel in government vehicles