Pakistan’s fuel vulnerability is usually discussed as an economic problem. It is that, but it is also a national security problem. Every few years, some external shock reminds the country how exposed it is to imported fuel and how quickly that exposure filters down into inflation, fiscal stress, and everyday hardship.

The latest crisis as a result of the war in Iran is only the newest example. Reuters reports that soaring prices and fears of shortages have already pushed up demand for electric motorbikes, after disruption around the Strait of Hormuz rattled Pakistan’s transport economy. What this episode exposes is how fragile Pakistan’s transport model really is.

Pakistan has built a transport system that leaves both the state and ordinary households hostage to fossil fuels, which is largely imported. The country’s urban development model has been built around the creation of signal free corridors that incentivise private transport. Reuters notes that about 40 percent of Pakistan’s petrol is used by two and three-wheelers in a country where public transport remains inadequate and that, after the latest fuel-price hike, a median household was spending 31 percent of its daily income on a litre of petrol.

THE COST OF TRANSPORT

Transport costs do not rise in the abstract. They rise for workers getting to their jobs, for parents trying to reach schools and clinics, and for households already struggling to absorb inflation. For wealthier groups, a fuel shock is painful, but for poorer groups, it can be destabilising. The World Bank estimates that economic instability and inflation pushed an additional 13 million Pakistanis into poverty over the last few years, raising the poverty rate to 25.3 percent in 2023-24.

Pakistan frames its transport crisis as an affordability problem. It is actually an institutional one — and every fuel shock makes the cost of that confusion clearer

Once households slide backward, recovery is slow. Recent ridership data released in a tweet by the Punjab government points in the same direction. Comparing a paid day with three fare-free days, the government reported a 60 percent increase in ridership, equivalent to roughly 528,000 additional passengers per day.

Read in isolation, that looks like a simple story about fare sensitivity. But in the context of recent fuel-price increases, it reveals that a large number of households are being pushed towards public transport not only by fares, but also by the rising cost of private mobility itself. Put simply, when fuel shocks hit, demand for affordable, collective transport surfaces immediately.

The people showing up on those fare-free days are not a statistical abstraction. They are workers who have been absorbing private transport costs because no reliable alternative existed. They are women for whom a rickshaw fare is not a minor inconvenience but a real constraint on whether a job outside the neighbourhood is worth taking. They are households that have quietly been running a daily calculation — motorcycle fuel versus bus fare versus staying home — and finding all the options expensive. The ridership surge did not create new demand. It revealed demand that was always there, suppressed by cost.

MOBILITY AS INFRASTRUCTURE

Energy security is, therefore, also a national security issue — and transport policy needs to be treated accordingly. A country that cannot move its people affordably without imported fuel is not dealing with a narrow transport problem; it is dealing with structural vulnerability.

Every shock to oil prices or supply chains quickly shows up in inflation, commuting costs, and political pressure. The burden, moreover, is not evenly shared. When transport costs rise, poorer households have far less room to adjust.

The most common objection to public transport in Pakistan is also the laziest one: the country cannot afford it. Pakistan is not too poor for public transport. It is already paying, every day, for its absence — through fuel vulnerability, high household transport costs and cities that keep sprawling without becoming more productive.

The issue is not whether Pakistan can afford public transport, but whether it has built the institutions needed to finance and sustain it properly. Too much of the debate still treats transport as a cost centre rather than as economic infrastructure. A functioning public transport system expands labour markets, lowers the cost of mobility, improves access to jobs and services, and reduces the drag created by congestion and fuel dependence.

Seen that way, it becomes obvious that public transport does much more than shorten commutes.

WRONG DIAGNOSIS, WRONG SOLUTION

Even when Pakistan does invest in transport, the conversation tends to stop at congestion — how to move people faster, how to unclog roads. That framing is too narrow, and it produces the wrong solutions.The real question is accessibility: whether people can reach jobs, schools, clinics and markets in a reliable and affordable way.

A city can keep building roads and still become less efficient, less inclusive and more expensive to live in. Once the issue is framed properly, the benefits of public transport extend far beyond shorter commute times. Good systems widen labour markets, reduce dependence on private vehicles and make it easier for lower-income groups and women to access work and services. The World Bank’s work on Karachi makes this clear: poor mobility restricts women’s access to jobs, while better transport can expand economic participation.

The environmental case is just as strong. Lahore’s 2023 emissions inventory found that transport accounted for 83 percent of the city’s emissions, underscoring how closely mobility and environmental stress are now linked.

Pakistan’s cities are also sprawling outward in ways that make daily life more expensive and public service provision more difficult. Longer trips, weak public transport and low-density growth lock households into motorcycles, rickshaws and other costly private solutions, deepening fuel dependence.

HOW TO PAY FOR PUBLIC TRANSPORT

The harder question, then, is not whether Pakistan can afford public transport. It is whether the country has built the institutions needed to finance and sustain it — and here the record is particularly weak

Too much of the policy conversation still assumes that large transit systems can be sustained through some crude mix of debt, operating subsidies, and farebox revenue. That is not a serious long-run model. The Organisation for Economic Cooperation and Development (OECD) argues that, with tightening public finances, ‘land value capture’ has become an attractive tool for financing transport infrastructure.

The World Bank has made a similar argument for developing countries, stressing that transport investments raise surrounding land values and that part of that increment can be used to help finance infrastructure.

Public transport does not only benefit the passenger standing at the station. It changes land values, commercial activity, development patterns and the accessibility of entire corridors. If new transport makes nearby land more valuable, improves market access and attracts denser development, some of that value should help pay for the system that created it. That is the principle behind land value capture. Land value capture is no longer a fringe idea; it is now a standard part of the global transport finance conversation.

For Pakistan, the problem is not only a shortage of funds. It is a failure to capture the returns that public transport already generates. Public transport creates benefits that extend far beyond the fare-paying passenger. A financing model that ignores all of that and relies mainly on fares and fiscal transfers is crudely designed from the start.

The issue is not that public transport generates too little value. It is that Pakistan has made too little effort to capture it.

The current disruption around the Strait of Hormuz is a live demonstration of this. While the policy conversation catches up, households are already adjusting — switching to electric motorbikes, reducing trips, absorbing costs the public system should have been designed to spare them.

THE REFORMS PAKISTAN KEEPS AVOIDING

Land value capture only works if the institutions around it are functional. That requires, at a minimum, integrating transport planning with land-use planning, improving land records, enabling denser mixed-use development around major corridors, and building financing models that do not rely so crudely on fares and subsidies alone.

Pakistan does not need more standalone transport projects. It needs a planning model that treats transport, land use and urban development as a single system. It also means recognising that public transport cannot be delivered as a narrow engineering project and then left to survive on fares.

Cities across both developed and developing countries have shown this for years. The OECD and World Bank literature on land value capture is useful not because Pakistan can copy any one model wholesale, but because it makes clear that sustainable public transport depends on institutional coordination. It depends on planners, economists, transport authorities, land managers and political actors working from the same view of what transport is supposed to do.

That is the harder reform agenda, and it is the one Pakistan tends to avoid.

The state is often more comfortable building visible infrastructure than reforming the institutions around it. But that is precisely why the affordability argument is so misleading. The obstacle is not simply money. It is institutional coherence. Public transport becomes financially and politically fragile when it is disconnected from wider urban development, broader economic strategy, and a credible plan for capturing the value it creates.

None of this is to suggest that progress is not being made. Punjab has already launched electric bus services in Lahore, with 27 buses placed on a 21-kilometre route, charging infrastructure set up, digital payment options introduced, and accessibility features built into the service. The route is expected to serve around 17,000 passengers a day. These are useful steps, and they matter.

The Lahore pilot is worth reading carefully precisely because of what it cannot do alone. Seventeen thousand passengers a day on a single 21-kilometre route is a meaningful number — but Lahore is a city of over 13 million people sprawled across an area where a single corridor barely registers. The pilot shows that, when affordable, accessible service is provided, people use it. That is not a trivial finding in a policy environment that has long used low ridership on underserved routes as evidence that Pakistanis simply prefer motorcycles.

What it cannot show on its own is whether the financing model is sustainable, whether the route will be extended, or whether the surrounding land use will be managed in ways that increase ridership and help pay for the system over time. A pilot answers the demand question. It leaves the institutional question entirely open.

THE STRESS TEST

The latest fuel disruption is only the latest reminder that Pakistan’s current transport model is deeply fragile. A country in which millions rely on motorcycles and rickshaws because quality public transport is missing will remain exposed to every jump in oil prices, every exchange-rate shock and every supply disruption in global energy markets.

Public transport shapes far more than commutes. It determines whether lower-income households can absorb a fuel shock or are pushed back into poverty by one. It determines whether women can access work reliably. And it determines whether Pakistan continues to build cities that deepen its dependence on imported energy, or begins to reduce it.

The country cannot afford to keep asking whether it is rich enough for public transport. It needs to ask a harder question: if it is already paying so much for bad mobility, why has it done so little to build the institutions that would allow better mobility to pay for itself?

This article draws on original research on public transport financing, land use and urban development in Pakistan by the writers

Bakhtiar Iqbal is an urban economist and climate strategist. He can be reached at iqbalbakhtiar@gmail.com

Sheheryar Khan focuses on environmental issues and is currently associated with WWF-Pakistan. He can be reached at sheheryarkhan95@gmail.com

Published in Dawn, EOS, April 19th, 2026