Iran closed the Strait of Hormuz after US and Israeli airstrikes, triggering a global oil crisis
Prime Minister Shehbaz Sharif is expected to take the nation into confidence soon on the overall situation amid the prevailing crisis in the Middle East following attacks by the US and Israel on Iran.
Tensions in the Middle East rose last week after US and Israeli airstrikes killed Iran’s supreme leader, Ayatollah Ali Khamenei, along with several senior officials, triggering retaliatory strikes from Tehran and widening the regional conflict. In response, Iran targeted US military bases across several Gulf countries, significantly escalating the confrontation.
Iran has also closed the Strait of Hormuz following US and Israeli airstrikes, halting the movement of oil supplies to many countries. As a result, crude oil prices on Friday recorded their strongest weekly rise since the extreme volatility of the COVID-19 pandemic in the spring of 2020, as shipping and energy exports through key waterways were disrupted.
A day earlier, Prime Minister Shehbaz reviewed several proposals and recommendations for implementing austerity and prudent spending. He stressed the importance of timely implementation of measures to protect the national economy.
“The government is closely monitoring the situation and will take all necessary decisions to ensure economic stability,” he said, promising that all possible steps would be taken to protect public interests during this challenging period.
He had emphasized on prudent management of national resources and assured that when the situation improves, the government would provide greater relief to the public. The statement clarified that austerity measures would not affect industrial or agricultural sectors, ensuring that production, exports and food security remain intact.
“Everyone should bear the burden of austerity and austerity fairly. The privileged sections of society and elite classes should set an example in making the necessary adjustments,” the prime minister had said.
The government sharply hiked diesel and petrol prices by Rs55 per litre, or 20%, on Friday – marking the first of a series of similar hikes expected in the coming days due to the ongoing conflict.
The increase in petrol prices was more than the increase in international markets, as the government chose to collect more money than required from motorcyclists and car owners to subsidize the use of diesel, mostly by public transport and the agricultural sector.
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The sharp rise has exacerbated the cost of living, with residents reporting higher transport prices and rising prices of daily necessities.
People also reported disagreements at petrol pumps where attendants refused to dispense less than one liter worth of fuel. According to residents, many customers asked for petrol worth Rs150 or Rs200, but the pump staff refused, saying the nozzle speed is fixed and fuel is either dispensed in smaller or larger quantities, leading to frequent arguments.
The rise in petrol prices also pushed up the price of fruits, vegetables and other daily necessities. Shopkeepers said the transport cost of bringing fruits, vegetables and goods had earlier been around Rs1,000 per trip but had now risen to between Rs2,500 and Rs3,000.
Drivers who provide pick-and-drop services to school children have also hiked their fares and residents say the entire burden has been shifted to the public.
