Pakistan’s Industrial Sector Warns of Export Crisis Amid Rising Petroleum Levies

Trade Data Highlights Sharp Decline in Exports, Soaring Trade Deficit

Adeel Siddiqui, a member of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) executive committee, warned on July 5, 2026, that rising petroleum prices and increased levies are destabilizing Pakistan’s industrial sector. Citing data from the Pakistan Bureau of Statistics (PBS), Siddiqui noted that exports fell to $2.24bn in June 2026, a 16.7pc drop from May and 9.6pc lower than the same period in 2025. Imports surged to $6.77bn, marking a 24.1pc month-on-month increase and a 26.3pc annual rise, according to the PBS.

Government Policies Under Fire as Climate Levies Soar

Siddiqui criticized the government for doubling the climate support levy on petrol and high-speed diesel to Rs5 per litre, despite global crude oil prices hitting a four-month low. “Consumers and industries have seen no relief despite falling global prices,” he said. The Petroleum Development Levy (PDL), part of Pakistan’s IMF program, remains high, exacerbating costs for manufacturers. “The industrial sector is bearing the brunt of these policies,” Siddiqui added.

Trade Deficit Reaches $39.46bn in FY26, Worsening Competitiveness

The fiscal year 2026 (FY26) trade deficit ballooned to $39.46bn, a 22pc increase from FY25, according to the PBS. Exports declined 6pc to $30.13bn, while imports rose 8.1pc to $69.59bn. Siddiqui attributed the crisis to “high financing costs, expensive energy, heavy taxation, and an uncompetitive business environment.” He warned that these factors are eroding Pakistan’s export competitiveness, which has already fallen to its lowest level in years.

Industry Leaders Call for Policy Reforms to Stabilize Exports

The FPCCI has urged the government to revise petroleum pricing mechanisms to reflect global market trends. Siddiqui emphasized that “tangible relief for industries and consumers is critical to reversing the downward spiral.” Without policy adjustments, Pakistan’s export sector faces prolonged stagnation, threatening jobs and economic growth.

Broader Implications for Pakistan’s Economy

The decline in exports and rising trade deficit highlight deeper structural challenges. Pakistan’s reliance on imported energy and volatile global oil markets leaves the economy vulnerable. Analysts note that without reforms to reduce energy costs and taxation, the industrial sector’s recovery remains uncertain.

What’s Next for Pakistan’s Export Sector?

With global oil prices expected to remain low, industry leaders argue that the government must prioritize reducing levies to stimulate production. However, the IMF’s fiscal constraints and domestic political pressures complicate immediate action. The coming months will test whether policymakers can balance revenue needs with the urgency of supporting key industries.