Business community rejects hike in petroleum prices

Published October 17, 2021
Trade and industry leaders have rejected the hike in petroleum prices. — AFP/File
Trade and industry leaders have rejected the hike in petroleum prices. — AFP/File

KARACHI: While rejecting the hike in petroleum prices, the trade and industry leaders on Saturday said the government’s move would not only hit the country’s economic performance, but also multiply the difficulties of the masses who have already been enduring skyrocketing food inflation.

They said since the massive rupee devaluation had raised the cost of doing business and fostered inflation, it was crucial to review the current strategies being pursued by the country’s economic managers. The rupee lost approximately 12.4pc against the dollar over the last five months, falling from Rs152.30 on May 17 to Rs171.20 on Oct 16. Atiq Mir, the chairman of All Karachi Tajir Ittehad, said consumers were in a state of shock after a meteoric hike in petroleum prices, accompanied with soaring food inflation, power and gas rates.

He also criticised the increase in electricity base tariff and suspension of gas supply to CNG stations for 10 days before the beginning of winter season in Sindh.

Zubair Motiwala, Chairman of Businessmen Group and a former president of the Karachi Chamber of Commerce and Industry, asked the government to subsidise essential items to protect the poor.

He said the government had always said it wanted to reduced the cost of doing business, but all these steps were in contrast to its policy as the masses suffer badly due to frequent hikes in petroleum prices, electricity and gas tariffs and other utilities in addition to fluctuating exchange rates and higher duties on imports.

In a statement, Mr Zubair said the international oil prices are on the higher side but the impact must not be passed on to the public as done in the past. “The petrol and diesel prices in Pakistan peaked at Rs87 and Rs65 per litre during the historically highest ever international crude price of $147.27 per barrel in July 2008. Now when it was around $85, the petrol price had been raised to a whopping Rs137.79 per litre which was beyond our understanding.”

He said rising petroleum prices and excessive devaluation would continue to increase the cost of doing business, which would terribly affect the industrial performance, raise unemployment and open the floodgates of inflation, particularly for the middle and lower segments of the society, besides making the poor poorer due to unbearable inflation.

He further opined that the increase in electricity tariff was probably due to ‘Take or Pay Agreements’ with the Independent Power Producers (IPPs) so the brunt of the policy should not be put on the people.

He said rising prices of food items would hit the purchasing power of the people while the government does not look serious in controlling food prices.

SITE Association of Industry President Abdul Rasheed asked the government to direct Sui Southern Gas Company Ltd to provide gas to industries with required pressure to complete export orders without disruption.

“The government has surrendered to the IMF and food mafia,” he remarked.

Korangi Association of Trade and Industry President Salman Aslam urged Prime Minister Imran Khan to reverse the recent hike as industrialists cannot afford record high production costs and the worst inflation due to an increase in petroleum products’ prices.

He said that a comprehensive system should be formed at the government level to control the production cost of industries and inflation. The government should not try to increase petrol prices to achieve the target of the petroleum development levy.

All Pakistan CNG Association Senior Vice-Chairman Shoaib Khanjee said the frequent closure of CNG stations has already rendered thousands of people jobless.

He said people would face a tsunami of food price hike in case petroleum prices are not reduced.

Published in Dawn, October 17th, 2021

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