Business leaders have warned that the unprecedented inflation, the worsening of conditions for the average person, and the industry-wide problems brought on by the unreasonably high cost of doing business will all be exacerbated by the dramatic increase in the price of petroleum products.
They criticized the caretaker government for failing to maintain petroleum prices due to falling landing costs of imported crude as a result of the rupee’s persistent rise against the dollar in the last eight interbank sessions, despite rising crude oil prices in the global market.
In a statement, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh explained that the rupee closed at 296.85 per dollar in interbank trade on Friday, representing a more than Rs 10 to a dollar gain after reaching Rs 307.10 on September 5.
The chief recalled that the apex chamber had repeatedly warned the authorities over the previous few months to address the teething issues with the import of Russian crude, i.e. handling of oil cargoes; adjustments required vis-à-vis refining processes and commercial transactional procedures to settle oil payments. The country would currently have more Russian crude, which is 40% cheaper than what is currently available on the international markets, had the authorities listened to the FPCCI, but they chose not to.
Mohammad Tariq Yousuf, president of the Karachi Chamber of Commerce and Industry (KCCI), said in a statement that it has become nearly impossible to run the industries at such a high cost. This was the fourth consecutive increase in petrol prices, whereas, during the caretaker government’s tenure alone, the price of petrol increased by more than Rs 58 per liter. This was going to cause a lot of problems for the already struggling economy because many industrial units have significantly reduced production due to high costs.
Given the country’s present economic predicament, the government must take drastic measures to raise the necessary funds to cover expenses and uphold its international obligations. However, rather than taking these actions back-to-back, the government should come up with some sort of effective plan to ensure some relief to the citizens and the industry who will not have to bear the brunt caused by consecutive price hikes.
It is pertinent to mention that Pakistan spends billions in providing “free fuel” and “free electricity” to the elite & upper class including judges, military personnel, bureaucrats, civil servants, and top govt officials. Not to mention Pakistan is the only country that generates revenue by maximizing taxes on the salaried class only, whereas agriculture, enterprise, real estate, and other key sectors are exempted from taxes.
Tariq Yousuf emphasized the need for an effective response to the current situation and for it to be handled carefully; otherwise, the cost of doing business would continue to rise, negatively affecting industrial performance, increasing unemployment, and unleashing a wave of inflation, especially among the middle and lower classes of society, in addition to making the poor even poorer due to intolerable inflation.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com