Authors
Dr. Sajjad Ahmad Jan (Associate Professor, Department of Economics
Coordinator & Senior Research Fellow, Development Insights Lab (DIL)
University of Peshawar)
Mr. Inam Ullah (Research Associate, Development Insights Lab (DIL)
University of Peshawar)
Mr. Bilal Yaqub (Research Associate, Development Insights Lab (DIL)
University of Peshawar)
Email:dil@uop.edu.pk
Executive Summary
This report examines the impact of the fuel price shock and CNG suspension on taxi/yellow cab and auto-rickshaw drivers in Peshawar. The report is based on survey evidence from drivers and documents changes in income, fuel cost, net earnings, trips, coping strategies, and perceived livelihood impact. The findings show substantial livelihood stress: average daily income declined, fuel costs increased, net income fell sharply, and many drivers responded by increasing fares or working longer hours.
Key Messages
- Average daily income declined from Rs. 3,480 to Rs. 2,648.
- Average daily net income declined from Rs. 2,350 to Rs. 1,400.
- Average daily trips declined from 11 to 7.
- Average net income declined by 42.8 percent.
- Increasing fares and working more hours were the most common coping strategies.
- No respondent reported a low impact; most reported high or very high impact.
Introduction
The US–Israel–Iran conflict in the Gulf region disrupted global energy markets, particularly through tensions and blockades around the Strait of Hormuz, one of the world’s most important energy trade routes. Around one-fourth of global seaborne oil trade and nearly one-fifth of global LNG supplies pass through this route. As a result of the conflict and supply disruptions, international oil prices increased sharply from around $60 per barrel in January 2026 to approximately $108 per barrel by 1 May 2026 (Bloomberg, May 2026).
The impact of these global shocks on Pakistan has been severe. Petrol and diesel prices in the country increased from PKR 253.17 and PKR 268.38 per litre on 1 February 2026 to PKR 399.86 and PKR 399.58 per litre respectively by 2 May 2026. At the same time, disruptions in LNG imports from Qatar forced the government to suspend gas supply to CNG stations across the country.
In Khyber Pakhtunkhwa, particularly in Peshawar, a large number of taxis, yellow cabs, and auto-rickshaws depend on CNG because it is comparatively affordable. Following the closure of CNG stations, drivers were forced to shift to petrol or LPG cylinders, both of which are significantly more expensive. This sharply increased operating costs, reduced drivers’ incomes, and negatively affected their overall standard of living.
To cope with rising fuel costs, many drivers increased transport fares, which further raised the cost of living for ordinary citizens who rely heavily on these modes of transport for daily commuting. The burden has been particularly severe for low-income households in Khyber Pakhtunkhwa, a province that has already suffered from terrorism, economic instability, and underdevelopment for more than two decades.
The situation is particularly striking because Khyber Pakhtunkhwa itself is a natural gas-producing province. The province currently produces around 349 million cubic feet of natural gas per day, while its estimated demand is around 185 million cubic feet per day, resulting in a surplus of approximately 164 million cubic feet per day. Despite this surplus, local transport drivers and consumers continue to face severe energy shortages and rising fuel costs.
Against this background, the present report examines the impact of CNG suspension and rising fuel prices on taxi/yellow cab and auto-rickshaw drivers in Peshawar. The study is based on a field survey of drivers and focuses on changes in their fuel costs, incomes, transport operations, and livelihood conditions. Peshawar has a large urban transport sector, with approximately 7,000 yellow cabs and around 50,000 auto-rickshaws operating in the city (DAWN E-Paper, 09 May 2026; Naya Daur, 21 November 2019). The findings of the survey are presented in the following sections.
Average values of key livelihood indicators before and after the CNG shock.
|
Average Income Before |
Average Income Now |
Average Fuel Cost Before |
Average Fuel Cost Now |
Average Net Income Before |
Average Net Income Now |
Average Trips Before |
Average Trips Now |
Average Daily Loss |
|
3480 |
2648 |
1312 |
1402 |
2350 |
1400 |
11 |
7 |
746 |
Key Finding:
- Average daily income declined from Rs. 3,480 to Rs. 2,648.
- Average fuel cost increased from Rs. 1,312 to Rs. 1,402.
- Average net income declined from Rs. 2,350 to Rs. 1,400.
- Average daily trips declined from 11 to 7.
These findings indicate substantial livelihood stress among taxi and rickshaw drivers.
The graph clearly illustrates the deterioration in the economic conditions of taxi and rickshaw drivers. Average daily income declined substantially, while fuel costs increased. As a result, average net income experienced a sharp reduction. At the same time, the average number of daily trips also declined, indicating reduced passenger demand and mobility activity. The combined effect of rising operational costs and declining earnings has significantly weakened the livelihood conditions of drivers.
Average percentage decline in income and net income among drivers.
|
Average Income Decline (%) |
Average Net Income Decline (%) |
|
22.9 |
42.8 |
The survey findings indicate that average daily income of taxi and rickshaw drivers declined by approximately 22.9 percent, while average net income declined by nearly 42.8 percent. The much larger decline in net income suggests that rising operational and fuel costs have severely reduced drivers’ actual take-home earnings. This indicates significant livelihood stress and declining economic sustainability among transport workers.
Frequency and percentage distribution of coping strategies adopted by drivers.
|
Coping Strategy |
Frequency |
Percentage |
|
Increasing fares |
16 |
72.7 |
|
Reducing expenses |
5 |
22.7 |
|
Working more hours |
15 |
68.2 |
|
Using savings |
1 |
4.5 |
|
Doing a second job |
1 |
4.5 |
The survey findings show that transport workers are adopting multiple coping mechanisms to survive rising economic pressures. Increasing fares was the most common response, reported by 72.7% of the drivers. Working more hours was reported by 68.2% of the drivers, indicating increased labour burden and longer working days. Reducing household expenses was reported by 22.7% of the drivers. Only 4.5% of the drivers reported using savings, while only 4.5% of the drivers reported taking a second job. These findings suggest that most drivers are coping through transferring costs to passengers and increasing work intensity rather than through financial resilience or diversified income sources. The limited use of savings indicates weak financial security among drivers.
The graph shows that the most common coping strategy among drivers is increasing fares, reported by 72.7% of respondents. This is followed closely by working more hours, reported by 68.2% of respondents. Reducing expenses was reported by 22.7% of respondents, while using savings and doing a second job were each reported by only 4.5%. These results suggest that most drivers are coping with rising costs by passing part of the burden to passengers and by increasing their own work effort. The limited use of savings indicates weak financial resilience among drivers.
Frequency and percentage distribution of perceived impact levels among drivers.
|
Impact Level |
Frequency |
Percentage |
|
Moderate |
6 |
27.3 |
|
High |
7 |
31.8 |
|
Very High |
9 |
40.9 |
The perceived impact of rising fuel and operational costs on drivers’ lives is overwhelmingly severe. 40.9% of the drivers reported a very high impact, while 31.8% of the drivers reported a high impact. Another 27.3% of the drivers reported a moderate impact. Importantly, no respondent reported a low or negligible impact. These findings indicate widespread economic stress and declining livelihood security among taxi and rickshaw drivers. The dominance of high and very high responses suggests that rising transport-related costs are affecting not only earnings but also broader household welfare and living conditions.
The
graph shows that a large majority of drivers reported severe impacts on their
lives due to rising fuel and operational costs. Approximately 40.9% of
respondents reported a very high impact, while 31.8% reported a high impact.
Another 27.3% reported a moderate impact. Importantly, none of the respondents
reported a low or negligible impact. These findings indicate widespread
economic stress and declining livelihood security among transport workers.
Informative and best effort
Awesome
Sad to know that 40.9% of the drivers reported a very high negative impact on the their livelihood due to the present price hike in the fuel prices