Bikes Crucial in Pakistan’s Budget 2026-27 Transport Policy
As Pakistan prepares its Budget 2026-27, the focus of transportation discussions remains disproportionately on passenger cars. However, recent data and market trends underscore a different reality: motorcycles, alongside rickshaws and loaders, are the backbone of daily mobility for the majority of Pakistan’s population.
The Pakistan Economic Survey 2024-25 highlights that motorcycles dominate the country’s roads with over 30 million registered units, accounting for 81% of the total vehicle fleet. In comparison, passenger cars, including jeeps and vans, number about 5.22 million – a significantly smaller share of the traffic composition. Correspondingly, production figures further emphasize this focus on two- and three-wheelers, with factories manufacturing roughly 1.21 million motorcycles and rickshaws from July to March 2024-25, compared to just under 97,000 passenger cars.
This disparity signals that transport policies centering on cars may not effectively address the needs of Pakistan’s transport ecosystem. For the upcoming budget, a recalibration is necessary to prioritize the affordability and viability of two- and three-wheelers.
The government has adopted a “carrot and stick” strategy to influence mobility choices, making petrol-powered vehicles more expensive while incentivizing electric alternatives. A Climate Support Levy has been applied to petrol, set to increase from Rs. 2.5 to Rs. 5 per liter, which disproportionately affects motorcycle riders given that two-wheelers consume around 40% of the nation’s petrol. For many dependent on motorcycles for daily work and commuting, this hike could significantly impact their livelihoods.
Conversely, subsidies are in place to encourage the adoption of electric two- and three-wheelers. Electric bikes (e-bikes) benefit from discounts of up to Rs. 80,000, and electric rickshaws for commercial use can receive subsidies up to Rs. 400,000. These incentives align with Pakistan’s New Energy Vehicle policy, reflecting a strategic push towards cleaner mobility solutions.
Despite these efforts, challenges remain. Consumers face concerns about the high cost of battery replacement, reduced reliability in extreme weather like monsoon floods, and a lack of qualified mechanics in non-urban areas. Furthermore, trust issues surrounding electric bikes hinder wider adoption among the lower-middle class who seek dependable and affordable transport options.
Looking ahead, there are calls for the budget to protect electric two- and three-wheelers from increased sales tax pressures as urged by the IMF. Applying an 18% sales tax indiscriminately could undermine the affordability of these vital electric vehicles. Instead, the government is encouraged to foster domestic manufacturing capabilities for batteries and motors, thus ensuring job creation, price stability, and better availability of spare parts within Pakistan.
In summary, Pakistan’s transport infrastructure relies heavily on motorcycles and rickshaws. The Budget 2026-27 should continue to balance discouraging fossil fuel use with making electric alternatives genuinely accessible and reliable. Only by supporting these fundamental modes of transport can the country ensure mobility for its citizens while steering towards a sustainable future.