Pakistan’s government is preparing to reintroduce targeted fuel subsidies if geopolitical tensions in the Gulf region persist, according to reports from Dawn.
The potential policy reversal marks a significant shift from the administration’s current stance on petroleum pricing deregulation, which has aimed to remove state intervention from fuel markets.
The petroleum minister has previously defended the daily pricing mechanism as a transparent system that protects consumers from market volatility.
However, the threat of sustained regional conflict introduces a new variable that could force the government to intervene to shield households and businesses from sharp price spikes.
This development underscores the vulnerability of emerging markets to external geopolitical shocks, particularly when domestic fiscal buffers are limited.
The renewed violence in the region contrasts sharply with market sentiment from just weeks ago, when traders were pricing in a potential unwind of the geopolitical risk premium.