Price of Ghee, Oil, and Sugar jump higher in Pakistan as inflation bites Azad News HD
The scope of the price surge
Ghee and cooking oil
The steep rise in ghee and cooking‑oil prices is hardly surprising in the context of Pakistan’s heavy dependence on imported vegetable oils (notably palm oil), global market volatility, and domestic cost pressures. For instance, data show that during 2024 the country imported roughly 1.319 million tons of palm oil (worth some US$1.26 billion) in the first five months alone—an increase over the same period a year earlier.
Retail reports in recent months have documented increases in the prices of first‐grade ghee and cooking oil by upward of Rs 50–60 per kg/litre in many markets.
According to one report:
“The retail price of first‑grade ghee and oil has surged by Rs 54 per kg, … the price for second‑grade oil … has surged … to Rs 512 per litre or even Rs 530–540 per litre.”
Thus, the rise to Rs 582 for first grade and Rs 540 for second grade that you mention aligns with this broader pattern of sharp increases.
Sugar
Sugar, too, has experienced persistent upward pressure. Although the increase you cite (Rs 2 to Rs 179 per kilogram) is smaller in absolute terms than for oils/ghee, sugar remains a high‑volume item in many households, and even small increases accumulate. Official Sensitive Price Index (SPI) data for Pakistan show sugar’s price rise among the items with notable annual increases: e.g., a 26.19% year‑on‑year rise was noted in one report.
Broader inflation backdrop
These commodity price hikes should not be viewed in isolation. They fall within a broader inflationary environment in Pakistan, where perishable food items, fuel, energy and import‑dependent goods are driving up costs for everyday consumers. For example:
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The SPI rose by 5.07% year‑on‑year in the week ending September 4, 2025, driven largely by increases in perishables and essentials
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For the week ending June 19, 2025, SPI rose by 0.27% on a weekly basis.
In short, the price hikes for ghee, oil and sugar are symptomatic of deeper inflationary pressures that are eroding purchasing power and raising household expense burdens.
Why are these prices rising?
Several inter‑linked factors are contributing to current food‑commodity price inflation in Pakistan. Some of the most salient are:
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Import dependency & global commodity prices
Pakistan depends heavily on imports for edible oils (palm oil, etc.). As noted earlier, more than a million tons of palm oil imports originate from Indonesia and Malaysia.When global prices of vegetable oils rise—due to weather events, supply disruptions, currency movements, shipping/logistics delays or changing global demand—importing countries like Pakistan feel the impact domestically through higher cost of inputs and hence higher retail prices.
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Currency depreciation & inflation
Exchange‑rate depreciation makes imports more expensive in local currency terms. As imported edible oils become costlier, producers and retailers pass on the cost to consumers. -
Supply chain & logistical constraints
Domestic factors—such as higher energy/fuel costs, transportation and storage expenses, local manufacturing overheads—add to the price burden. Local manufacturers of vanaspati/ghee often cite higher raw‑material and processing costs when announcing price hikes. -
Demand pressure & substitution effects
As some items become expensive, consumers may switch to other oils or fats, increasing demand for those substitutes and pushing their prices up. Also, in a high‑inflation context, speculative or hoarding behaviour may play a role. -
Policy, taxes and subsidy dynamics
Regulatory changes, subsidy removals, increased tariffs or imposition of new charges (directly or indirectly) can contribute to cost increases. Even if subsidies remain, rising base costs may force producers to raise prices. -
Domestic inflation and wage pressures
When wages and other input costs (labour, packaging, utilities) go up, producers pass on higher costs though the supply chain, culminating in higher retail prices.
Thus, the rises in ghee, cooking oil and sugar represent the convergence of external shocks (global commodity/energy markets, currency) and internal cost pressures (manufacturing, logistics, domestic inflation).
Who is most affected?
The burden of these price hikes falls disproportionately on certain segments of the population:
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Low‑ and middle‑income households: For families already operating on tight budgets, especially those spending a large share of income on food, even moderate increases in staple items can force difficult trade‑offs (e.g., choosing less diverse diets, cutting back on non‑food expenses).
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Fixed‑income earners: Households with incomes that do not adjust quickly (government salaries, pensioners, informal workers) feel squeezed when prices rise faster than wages.
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Larger families: Commodities such as ghee, oil and sugar are consumed in relatively large quantities, especially in larger households; so price hikes affect them more in absolute terms.
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Rural vs urban divide: While urban households often have better access to alternatives and competition across markets, in more remote or rural areas price increases may be compounded by weaker supply chains and higher transport/logistic margins.
Moreover, the cumulative effect of cost‑increases across multiple essential items (food, fuel, energy, transport) means that households may have to cut back on discretionary spending, reduce savings, resort to lower‑quality/less‑nutritious foods, or absorb the cost rise by sacrificing other necessities (health, education, etc.).
The human cost & everyday coping strategies
For many households, what might appear as a modest increase—say Rs 10 per litre of cooking oil or Rs 2 per kilogram of sugar—translates into real trade‑offs:
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A family buying 5 litres of cooking oil per month will spend an extra Rs 50 just because of the Rs 10 increase. Over a year, that adds up to Rs 600.
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If sugar consumption is, say, 10 kg per month, a Rs 2 increase means Rs 20 extra per month = Rs 240 extra per year.
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Multiply this by other staples (flour, pulses, dairy, meat) each experiencing rises, and you see how the monthly grocery bill can climb significantly.
In response, households are likely to adopt various coping strategies:
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Switching to cheaper brands or lower grades of ghee/oil.
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Reducing consumption of ghee/oil or sugar, or substituting with cheaper fats or sweeteners.
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Buying in smaller quantities, which often increases per‑unit cost.
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Reducing other non‑essential expenditures (entertainment, travel, clothing) to free up budget for food.
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Seeking informal/in‑kind support or relying on family/community networks.
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Shopping in markets with lower prices, leveraging competition, or waiting for sales/promotions.
While these strategies may mitigate the immediate burden, they also risk long‑term welfare: lower nutrition quality, less variety in diet, higher workload (if cooking from scratch more), and stress from financial uncertainty.
Policy & systemic implications
The sustained rise in basic commodity prices raises several questions for policymakers, businesses and civil society:
For policymakers:
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Inflation‑monitoring & targeted support: While headline inflation may moderate, price‑rises in key staples hurt vulnerable households most. There is a case for more granular monitoring (e.g., for ghee/oil, sugar, pulses) and targeted relief or subsidies.
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Import regulation & diversifying supply: Given the dependence on imports for edible oils, policies aimed at diversifying supply sources, incentivising local production, and reducing logistics/bottleneck costs can help.
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Exchange‑rate stability & macro‑management: Currency volatility increases import‑cost pressures; macroeconomic stability is thus critical to anchoring consumer prices.
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Consumer protection & hoarding/smuggling crackdown: Where domestic price rises are aggravated by hoarding, smuggling or speculative stockpiling, enforcement is important. Pakistan has had crack‑downs on smuggling of sugar and other essentials.
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Subsidy & relief programmes: For the most vulnerable, direct transfer programmes, subsidised commodity stores (state‑run outlets) or rotating price‑ceiling interventions may provide relief.
For businesses (producers/retailers):
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Cost transparency & communication: When input costs rise (oilseeds, palm oil, fuel, packaging), transparent communication to consumers may reduce back‑lash.
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Efficiency improvements: Enterprises can work on reducing waste, improving logistics, negotiating better import contracts, and hedging commodity costs.
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Product innovation: Lower‑cost packaging, smaller sizes, or alternative fatty/oil blends may help households maintain consumption within budget.
For civil society & consumers:
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Budgeting & informed shopping: Awareness of price trends, comparing brands and sizes, and planning purchases can help households stretch budgets.
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Nutrition mitigation: When staples rise, households should try to maintain diet quality through alternatives (cheaper pulses, seasonal vegetables) rather than simply reducing quantity.
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Advocacy: Civil society can advocate for transparency, equitable relief measures, and monitoring of price‑build‑ups and supply chain inefficiencies.
The significance of the latest hikes
The specific numbers you cite—first‑grade ghee/oil at Rs 582, second‑grade at Rs 540, sugar at Rs 179—are more than just statistics. They reflect a moment of strain for many households and serve as a lens into broader structural challenges facing the economy and supply chain.
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Information effect: These increases signal to consumers that costs are rising, which can reduce consumer confidence, raise demands for higher wages (fueling a wage‑price spiral), and dampen discretionary spending.
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Equity effect: Even though richer households can absorb cost rises more easily, lower‑income households are disproportionately impacted, raising concerns about inequality and social vulnerability.
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Cumulative effect: While each item’s increase may seem modest, cumulative rises across multiple staples can drive a sharp increase in a family’s monthly cost of living, possibly outpacing income growth.
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Policy test: Price increases in everyday items test government and institution responses—be it relief measures, subsidies, or logistic/supply interventions—and serve as a measure of policy effectiveness in shielding vulnerable groups.
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Signal to producers/importers: For producers, importers and retailers, sustained price increases may prompt adjustments in production, import volumes, storage, supply‑chain logistics, and even brand/grade offerings.
Looking ahead: what to watch
Given the current pressures, several key variables will determine whether things become worse, stabilise or improve:
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Trend in global edible‑oil prices: If global palm/soybean/canola oil markets remain volatile (due to supply disruptions, weather, geopolitical tensions) then domestic imported‑oil cost will continue to feed into retail.
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Exchange‑rate movement: A weakening rupee will make imports costlier and put upward pressure on many imported‑input‑dependent goods.
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Domestic supply & production capacity: If Pakistan can increase local production of oilseeds, or reduce reliance on imports through better agro‑policy, that might moderate future hikes.
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Fuel, energy & logistic costs: As transport/fuel costs rise, they increase the cost of bringing commodities to market (which in turn raises retail prices).
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Policy interventions: Effective subsidies, import‐reliefs, regulation of hoarding/smuggling, and active monitoring of essential‑commodity markets can mitigate price rises.
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Household income growth & wage inflation: If incomes rise meaningfully, households can better absorb cost increases; if incomes stagnate, the burden becomes unsustainable.
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Consumer substitution/behaviour: If consumers shift away from expensive items to cheaper alternatives, demand dynamics may change, affecting future pricing.
Conclusion
To summarise: the recent hikes—first‑grade ghee/oil to Rs 582 per litre/kg, second‑grade to Rs 540, sugar to Rs 179 per kg—are indicative of persistent inflationary pressures in Pakistan’s food sector. They reflect a combination of global commodity cost increases, import dependency, currency and supply chain pressures, and domestic cost pressures.
For households, the immediate effect is increased expenditure, reduced discretionary spending, and tougher trade‑offs. For policymakers, the challenge is to curb inflation in essentials without stifling supply or creating distortions. For businesses, the challenge is to manage rising costs while maintaining affordability.
