is there any one who regulates these fares ? i mean theres got to be some one to keep a check on these fares.
Generally, Civil Aviation Authority of the country concerned would be the one. Don't be surprised at the authorized maximum airfare, if there is one.
if authorized max fare is published IATA sector fare, you still got a ticket at a bigggggggggggg discount.
IATA Published KHI-LYP oneway economy class sector fare would be something like USD150.00 or more plus taxes.
Market airfares comedown only with competition. And that is why PIA/CAA do not let foreign airlines to operate into northern Pakistan esp around Lahore region.