High-octane fuel hike: Economics of driving SUVs undergoing significant shift

LAHORE: With petrol prices in Pakistan remaining above Rs 320 per litre and the government sharply increasing the levy on high-octane fuel — pushing its price to around Rs 535 per litre — the economics of driving sport utility vehicles (SUVs) is undergoing a significant shift.

Industry experts said this change is rapidly tilting consumer preference toward plug-in hybrid electric vehicles (PHEVs) and range-extended electric vehicles (REEVs).

According to Syed Asif Ahmed, Director Sales and Marketing at Chery Master Pakistan, the latest pricing dynamics are putting particular pressure on premium SUV users, as most high-end models are designed to run on high-octane fuel.

Official data showed ex-depot MS petrol at approximately Rs321 per litre, while high-octane petrol has surged to around Rs 535 per litre, highlighting Pakistan’s continued exposure to imported fuel volatility.

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Ahmed said the conversation around new energy vehicles has moved beyond environmental considerations. “For Pakistani consumers — especially SUV users —this is now a straightforward economic decision,” he said.

“At these price levels, running a conventional petrol SUV is becoming a serious burden on household budgets.”

A typical petrol-powered C-segment SUV, delivering around 10 kilometres per litre, now costs roughly Rs 32 per kilometre to run on regular petrol. However, for luxury SUVs using high-octane fuel, the running cost jumps significantly to around Rs 53–54 per kilometre, making daily usage increasingly expensive.

Even conventional hybrids, with an assumed fuel economy of around 18 kilometres per litre, cost approximately Rs 18 per kilometre on regular petrol.

If operating on high-octane fuel, that cost can rise to nearly Rs 30 per kilometre.

“A hybrid improves efficiency, but it still remains exposed to petrol price shocks,” Ahmed noted.

“The vulnerability is reduced, not removed.”

He argued that PHEVs and REEVs fundamentally change this equation by allowing most daily urban driving to be completed on electricity rather than petrol.

Using the Chery Tiggo 9 PHEV as an example, Ahmed said the SUV is equipped with a 34.46 kWh battery offering a claimed 170 km pure electric range under the NEDC cycle.

“At a household electricity tariff of Rs 50 per unit, a full charge costs about Rs 1,723,” he explained. “Spread over 170 kilometres, that translates into a running cost of roughly Rs 10 per kilometre.”

This places a plug-in SUV dramatically below both conventional petrol and hybrid SUVs in day-to-day operating cost. Compared to a regular petrol SUV, the saving stands at around Rs 22 per kilometre, while against high-octane luxury SUVs, the saving expands to approximately Rs 43 per kilometre. Even compared to conventional hybrids, PHEVs offer a cost advantage of roughly Rs8 to Rs20 per kilometre, depending on fuel type.

Ahmed added that the advantage becomes even more compelling for urban households with rooftop solar installations.

Pakistan’s rooftop solar market has expanded rapidly in recent years, with net-metered capacity rising into several gigawatts by 2025, reflecting a growing shift toward self-generation.

“This is where Pakistan’s energy transition and mobility transition begin to converge,” Ahmed said.

“A household generating its own electricity is not just reducing its power bill—it is also significantly lowering the cost of mobility.”

He noted that PHEVs and REEVs are particularly well-suited to Pakistani SUV buyers, who require space, flexibility, and long-distance usability, but are increasingly constrained by fuel costs. Unlike full battery electric vehicles (BEVs), these technologies offer electric-led commuting without complete dependence on a still-developing charging network.

Ahmed also linked the argument to the broader economy, noting that Pakistan’s reliance on imported petroleum continues to exert pressure on foreign exchange reserves and fiscal stability during periods of global oil volatility.

Pakistan’s Fiscal Risk Statement has warned that a 20 percent increase in global oil prices could widen the fiscal deficit by approximately Rs 487 billion in FY2026, driven by lower petroleum levy revenues and higher subsidy requirements.

“The case for PHEVs and REEVs is not about one brand or one product,” Ahmed said. “It is about providing Pakistani consumers with a realistic SUV solution that reduces running costs, lowers exposure to oil shocks, and aligns with local driving conditions.”

As fuel prices remain elevated—particularly for high-octane users—the market appears to be moving toward a clear conclusion: for Pakistani consumers seeking to retain SUV mobility without absorbing the full impact of fuel inflation, plug-in hybrids and range-extended EVs are emerging as the most practical and economically viable solution.

Copyright Business Recorder, 2026