State-run public transport in Pakistan's capital and most populous province will be free for the coming month, officials said Friday, after the government drastically raised fuel prices due to the Iran war.

The announcement came after street protests and long queues of motorcycles at fuel stations triggered by a late-night decision to impose a 42.7-percent rise in the price of petrol to 485 rupees (US$1.74) per litre.

Prime Minister Shehbaz Sharif backpedaled late Friday, saying he was reducing the levy and setting petrol prices at 378 rupees per litre. 

"This decrease will be applicable for at least one month," he said in a televised national address. 

"I promise I will not rest until your life is back to normal," he added.

Sharif did not reduce the price for diesel, which will remain at 520 rupees per litre  following a 54.9-percent price hike.

Economic burden

"All public transport in Islamabad will be made free of cost for the general public for the next 30 days, starting tomorrow (Saturday)," Interior Minister Mohsin Naqvi wrote on X.

The government will bear a burden of 350 million rupees, he added.

The chief minister of Pakistan's most populous province, Punjab, also lifted the cost of travel for state-run public transport, and announced "targeted subsidies" for trucks and buses.

Maryam Nawaz Sharif urged operators not to pass on increased costs to passengers, adding: "We promise to relieve the public of economic burden as soon as conditions improve."

In Sindh, the provincial government in Pakistan's biggest city, Karachi, announced similar subsidies for motorcyclists and small farmers.

The US-Israel war on Iran, launched on February 28, has plunged the Middle East into conflict, with Iranian retaliatory strikes hitting targets across the Gulf and virtually freezing shipping in the Strait of Hormuz.

The key waterway normally sees about a fifth of the world's energy supplies pass through it, much of it bound for Asia.

The government has unveiled a raft of austerity measures designed to save fuel, including moving many government offices to a four-day workweek, extending school holidays and moving some classes online.

Protests

Pakistan is classified as a lower-middle-income country, with roughly 25 percent of its 240 million population living in poverty, as per World Bank data.

The government hiked fuel prices by 20 percent in early March but has spent weeks resisting further increases, and insisting that it could absorb higher prices and not pass them on.

On Friday, dozens protested in the Punjab capital Lahore, calling on ministers to reverse the decision.

"The government, overnight, has dropped a 'petrol bomb' on its people," Naveed Ahmed, a 39-year-old protestor, told AFP.

"Our nation cannot bear this situation right now. This storm of inflation must be stopped, and relief should be provided to the public," he added.

Several Asian countries have hiked fuel prices or implemented other measures to address the crisis sparked by the Iran war.

On Thursday, Bangladesh increased prices of liquefied petroleum gas used for cooking and compressed natural gas used in some cars by 29 percent.

Earlier this week, the International Monetary Fund warned that vulnerable economies, such as Pakistan, did not just face pressure from higher energy prices, but from supply chain snarls as well.

The IMF announced on March 28 that had reached an initial agreement with Pakistan to unlock a new $1.2-billion package as part of its support programmes for the country.

"The rise we are seeing is not due to the (Iran) war, but to pressure from the IMF, pressure that must be resisted," said another protester in Lahore, Hafiz Abdul Rauf.

"For God's sake, step back from these demands and show some compassion for the people."