Pakistan International Airlines (PIA) may face serious operational difficulties after jet fuel (JP-1) prices reportedly surged by nearly 150% since March 1, 2026. The airline’s new majority owner, Arif Habib, warned that continued high fuel costs could make operations unsustainable.
Surge in Jet Fuel Prices
Official rates seen by Dawn show that JP-1 prices rose from Rs190 per litre on March 1 to Rs472 per litre by March 21, an increase of 150%. This hike comes amid global supply chain uncertainty, largely influenced by the US-Iran war.
Arif Habib Warning
Arif Habib, chairman of the consortium that owns PIA, stated in an interview aired on Bol News that if fuel prices remain high, PIA could be forced to shut down. He urged the government to reconsider the fuel price hikes to prevent disruption of airline services.
Government Measures and Subsidies
The government had increased jet fuel prices partly to manage a cross-subsidy and ease fiscal pressure. Finance Minister Muhammad Aurangzeb said “targeted relief” measures were being implemented, costing the government Rs69 billion in fiscal resources. Habib, however, criticized these measures as unsustainable for aviation.
Impact on Ticket Prices
The surge in fuel costs has already affected fares. Domestic tickets have increased by Rs10,000-15,000, while international fares rose by Rs30,000-40,000. Aviation experts note that fuel constitutes 30-40% of airline operating costs, so further increases may impact affordability and competitiveness.
Strategic Implications for PIA
The hike highlights the challenges PIA faces under privatization and energy price volatility. Habib emphasized that without corrective measures, the airline may not be able to continue operations, underlining the need for policy support to ensure PIA’s survival.