By Sardar Khan Niazi

By all global accounts, commodity prices are falling. From oil to wheat to industrial metals, the world is finally experiencing relief after years of post-pandemic inflation. However, in Pakistan, the change is barely visible to the average consumer. According to the World Bank’s Commodity Markets Outlook, international commodity prices dropped by 24% in 2023 and are expected to fall by another 7% over the next two years. That should, in theory, mean lower fuel, food, and import prices for countries like Pakistan. Yet, despite these developments, the country’s inflation rate remains stubbornly high, and prices of daily-use items continue to pinch household budgets. Take petroleum products, for example. Global crude oil prices have slid below $80 per barrel in recent months. However, local fuel prices remain elevated. As of August 2025, petrol stands at around Rs 290 per liter. Much of this is due to high taxation–levies, GST, and customs duties make up a large portion of the retail price. Consumers see no relief because the government, desperate to meet IMF targets and fiscal shortfalls, absorbs the benefit of global declines. In grocery markets across Lahore, Karachi, and Peshawar, the story is the same. While international wheat prices have seen a downward trend, atta (flour) continues to retail at Rs 140–160 per kg in many urban areas. The imported wheat fiasco earlier this year added insult to injury. Despite a bumper local harvest, the government authorized wheat imports that flooded the market, driving farm-gate prices below support levels. Farmers protested in Multan, Vehari, and parts of KP, while consumers still paid high prices for flour due to storage, transport, and cartelization costs. Even vegetables and pulses, largely domestically sourced, show no significant decline in price. A recent survey by the Pakistan Bureau of Statistics shows that prices of onions, tomatoes, and lentils have either remained flat or risen, despite falling transportation and input costs. In cities like Quetta and Sukkur, traders blame inconsistent supply chains and intermediary margins. The so-called “mandi mafia” continues to pocket the difference between producer and consumer prices, undisturbed by any serious regulatory oversight. Electricity tariffs are another example. As global coal and LNG prices dip, one might expect a reduction in power costs. However, circular debt, capacity payments, and poor energy policy ensure that power tariffs keep increasing. The latest hike in electricity bills has sparked fresh protests in cities like Hyderabad and Faisalabad. In stark contrast, Pakistan’s stock market has surged in recent months, buoyed by hopes of falling import bills and ongoing IMF negotiations. The KSE-100 index recently hit record highs, with investors pricing in the benefits of lower global input costs. However, that optimism has not trickled down to the real economy. Industrial production remains stagnant, and SMEs struggle with high utility bills and poor access to credit. The inability to translate global relief into local benefit reflects deep inefficiencies in Pakistan’s policy, trade, and distribution systems. So what must be done? First, fiscal discipline must not come at the cost of public welfare. If global prices fall, the government must reduce taxes and duties on essentials to pass benefits to the consumer. Second, we need urgent market reforms and to dismantle Intermediaries, hoarders, and cartelized supply chains through aggressive competition policy and transparency in procurement. Third, real-time pricing mechanisms and better data integration can ensure our economic policies are responsive–not reactive–to global shifts. In conclusion, the world is breathing easier–but Pakistan continues to suffocate. Until we fix the pipes that connect global price signals to local markets, the average Pakistani will remain cut off from global economic relief. The opportunity is knocking. We need to open the door.