South Asia grapples with energy crisis as Gulf tensions mount

Pakistan's government has activated a fuel subsidy programme effective from Wednesday in a bid to shield consumers from the sharp acceleration in petrol and diesel costs, officials confirmed. The measure underscores growing economic strain across the region as Gulf-linked energy disruptions cascade southward, affecting supply chains and domestic fuel markets.

Bangladesh, separated from Pakistan by more than 2,000 kilometres, faces similarly acute challenges as regional energy security deteriorates. Power generation constraints and fuel supply bottlenecks have begun affecting both nations, with implications for industrial output and household consumption across the subcontinent.

The timing of Pakistan's subsidy announcement reflects broader anxiety among South Asian governments over energy accessibility and affordability. Officials in Islamabad have indicated the support package targets middle and lower-income households most exposed to price volatility in essential fuels.

Economists warn that while subsidies provide short-term relief, sustained energy disruptions could pressure inflation and government budgets across South Asia. The region's heavy dependence on imported petroleum products leaves countries vulnerable to external shocks emanating from the Arabian Peninsula and Persian Gulf corridors.