Sarmad Ali
THE cost of living is not merely measured through economic indicators but by the food left in the shopping bag, the fuel left in the motorcycle tank and the electricity bill that competes with rent and school fees. Inflation has forced households to reconsider their affordability capacity and focus on latest prices increase. Although annual consumer inflation eased from 11.1 percent in August to 10.26 percent in September 2026, yet prices continued to rise. The Pakistan Bureau of Statistics recorded a 1.27 percent month-on-month increase in the Consumer Price Index. Meanwhile, the weekly Sensitive Price Indicator rose by 0.57 percent in the week ended 8 October. Pakistan’s inflation trajectory has been volatile since 2022. The September CPI reading of 10.26 percent was lower than August’s 11.1 percent, but it remained substantially above the 5.8 percent recorded in September 2025.
During the first quarter of the 2026-27 financial year, inflation stood at 10.20 percent, according to the Pakistan Bureau of Statistics. The weekly indicator provides a more immediate view of the pressure on essential purchases. For the week ended 1 October, the Sensitive Price Indicator rose by 11.53 percent year-on-year. The index covers 51 essential items across 50 markets in 17 cities, making it particularly relevant to ordinary households’ daily spending. These measures capture different aspects of inflation. The CPI covers a broader basket of goods and services, while the SPI tracks selected essentials at shorter intervals. Together, they show that the cost of necessities remains a persistent problem even when the headline monthly inflation rate fluctuates.
Petrol and diesel prices affect far more than private transport. They influence the movement of agricultural produce, food distribution, public transport, commercial deliveries and a wide range of services. When fuel becomes more expensive, the resulting pressure can reach consumers well beyond the petrol station. Pakistan’s fuel prices have been particularly volatile amid international energy-market disruption and tensions in the Gulf region. On 13 October, the government reduced petrol by PKR 2.93 per litre to PKR 395.37, while increasing high-speed diesel by 61 paisa to PKR 396.85 per litre, according to state broadcaster Radio Pakistan. The contrasting adjustments underline the uncertainty facing consumers and businesses.
In October, petrol and diesel prices remained near PKR 400 per litre due to repeated revisions driven by global oil prices, import costs and geopolitical tensions around the Strait of Hormuz. Pakistan’s dependence on imported energy exposes its economy to external shocks, while temporary declines in global prices may not translate into immediate domestic price relief. Households face mounting pressure as rising transport and energy costs reduce purchasing power. In the week ended 1 October, onion prices rose 114.20% year-on-year, wheat flour 32.65% and mutton 15.07%. LPG prices increased 66.59%, while electricity costs rose 58.59%, intensifying the cost-of-living crisis. Although prices of tomatoes, potatoes, sugar and several pulses declined, these reductions did not offset increases in other essentials. September CPI data showed monthly urban price rises of 29.17% for onions, 3.86% for wheat and 2.28% for wheat flour, sustaining pressure on household budgets.
These increases affect products that form part of everyday meals, rather than occasional discretionary purchases. Food inflation disproportionately affects poorer households, which spend a large share of their income on essentials. Rising prices force families to reduce quantities, switch to cheaper foods or cut other expenses. Even when inflation slows, lost purchasing power and living standards may not recover quickly. Food and fuel are only part of the burden.
In September, housing, water, electricity, gas and fuel costs rose 3.05% month-on-month, while transport prices increased 5.75%, according to the Pakistan Bureau of Statistics. These increases place additional pressure on household budgets, leaving families with less money for food, healthcare, education and other necessities. Rising transport costs also make daily commutes more expensive for workers, students and people dependent on public transport.
For low-income households, essential expenses such as food, transport and utilities are difficult to avoid or reduce significantly. Families may postpone discretionary purchases, but basic needs remain unavoidable. When wages fail to keep pace with inflation, disposable incomes shrink and purchasing power declines. Consequently, even employed households may struggle to maintain their living standards and meet essential expenses without accumulating debt or exhausting savings.
Rising living costs also weaken consumer demand, as households cut spending on non-essential goods and services to cover basic needs. This can hurt businesses and widen inequality between families able to maintain their living standards and those forced to make deeper sacrifices. The National Price Monitoring Committee reviewed inflation on 8 October, raising concerns over wheat flour prices and wholesale-retail price gaps. Provincial and district authorities were directed to monitor supplies, market arrivals, hoarding and unjustified price increases. Despite these measures, annual CPI inflation remained above 10% in September, while weekly inflation and frequent fuel-price revisions continued to burden households. Pakistan’s cost-of-living crisis extends beyond monthly inflation figures. Slower inflation does not reverse previous price increases. For households whose incomes have failed to keep pace, rising food and fuel costs continue to erode purchasing power, savings and financial security.
—The writer occasionally contributes to the national press.