KARACHI: Trade and industry leaders have slammed the government for increasing the petrol and diesel rates by a whopping Rs30 per litre which will not only multiply the woes of already inflation-hit masses but will also push up the cost of production.

They said the government bowed to the IMF pressure to withdraw the fuel and power subsidies for releasing a $1bn tranche to pull the country from an economic meltdown.

Chairman Businessmen Group (BMG) Zubair Motiwalla anticipated a jump in production cost by 5-7pc due to the petroleum price hike which will have a multiplier impact on the retail prices of goods which would make the life of the masses more miserable due to the rising cost of living.

“The jump of Rs30 per litre in petrol and diesel will be difficult for the people and the industry to absorb,” he said.

Increase in fuel prices will hit already burdened masses

He said “the government should have increased the petroleum prices in phases rather than giving a straight jerk to the consumers as well as to the industrial sector,” he said, adding that the government had met one of the IMF’s demands to secure the loan.

“I predict more tough days when the government will meet the other IMF conditions like increasing power and gas tariff, reducing circular debt and removing subsidies,” Zubair said, urging the government to announce a “financial emergency in the country.”

President Falahi Anjuman Wholesalers Vegetable New Subzi Mandi Super Highway, Haji Shahjehah anticipated a jump of Rs5-7 per kg in vegetable rates as the transporters would not hesitate in passing on the burden of a petroleum price jump to the consumers.

“This is a serious hit for the consumers who are already hard-pressed over soaring prices of essential items,” he said. The government should have raised the fuel rates by Rs10 per litre in phases instead of giving a big shock to the masses to meet IMF’s demand.

This massive price hike in petroleum products would increase the cost of living thus forcing the low-income group consumers to meet their daily demands of food items by resorting to corruption and taking bribes, he feared.

“In already volatile current economic and political conditions, it is a cruel act of the government,” Shahjehan said.

Patron Karachi Wholesalers Grocers Association (KWGA), Anis Majeed estimated a price hike of Rs2-3 per kg in items like pulses, sugar, rice, wheat-related products, etc keeping in view a difficult supply chain system involving the arrival of imported goods at the port and then moving to factories and then coming back to the wholesale markets. The locally produced items arrive from Punjab and Sindh areas whose transportation is already very high. He said after increasing the wholesale rates, the retailers would also add their transportation costs.

President Karachi Chamber of Commerce and Industry (KCCI), Mohammad Idress termed the government’s decision as one of the most unpopular to meet IMF demand.

He said the time has come that the government should take on board trade and industry stakeholders and all the four provinces to devise an alternative solution as to how to mitigate fuel import bill by at least 20-25pc as well as the cost of doing business by shifting focus towards other energy sources.

He recalled that the government had saved power by cutting business hours of trade during the peak of Covid-19 and the same kind of strategy is now needed to offset the huge spending on import of petrol and diesel.

Published in Dawn, May 27th, 2022