Govt plans exit from tobacco price fixation, directs food ministry to prepare deregulation plan in three months

The Economic Coordination Committee has asked the food ministry to submit a proposal within three months for ending federal control over tobacco price-setting, while keeping existing indicative prices and cess rates for the 2026 crop and financial year 2026-27. Profit by Pakistan Today reported that the committee approved carrying forward the prices set for 2025.

For Flue-Cured Virginia, officials estimated production costs at Rs473.61 per kilogram. A calculation using 5.43% inflation gave a proposed price of Rs523, while the Pakistan Tobacco Board said inflation had reached 9.26% in August 2026, implying Rs541.14; the ministry backed retaining the earlier rate, citing economic conditions and growers’ interests. The committee also discussed surplus production and the possibility of exporting it, and asked the ministry to develop a workable deregulation mechanism.