Business community criticises increase in POL prices

Business community has expressed its serious apprehension about the notification of increase in oil prices issued by Oil and Gas Regulatory Authority (OGRA) and increase in export refinance rate by one percent and said increase in petroleum prices not only affected the immediate consumers but also the common people.
They said that the government while increasing oil prices has forgotten the poor and who are facing hardship to even properly feed their families. They demanded immediately withdraw its decision to increase the prices. They believed that hike in oil prices affect overall inflation. Already badly hit by inflation, the people in Pakistan are crying against price hike in petroleum related products.
Elected Vice President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Khalid Tawab has said that our economy is worsening day by day because of continuous increase in petroleum, gas and electricity prices. Our industrial sector is not performing well and under such circumstances. He said that with the increase in oil prices quantum of taxes also increase, which should be avoided.
He criticised the government for "inflicting this heavy blow on the common man at a time when the country was facing a very high inflation rate, especially in food items.' Chairman, Pakistan Chemical and Dyes Marches Association, Haroon Aga said that increase in export refinance rate and oil prices would increase cost of manufacturing.
He said that the continuous prolonged power outages have compelled many of the large industrial units to close down and this situation is spoiling the reputation of exporters, as they are unable to complete the orders in time and hence depriving the country of much needed foreign exchange.
The President, Pakistan Intellectuals and Businessmen Forum, Mian Zahid Husain in his statement while terming the increase in oil prices to cripple the economy and make the people's lives miserable, demanded to withdraw this unjustified and unpopular decision.
He said that the government is increasing POL prices, power and gas tariffs and other utilities' prices blindly and heartlessly under the IMF dictation totally ignoring the plight of industry and the general masses.
Siraj Kassam Teli, Chairman Businessmen Group (BMG) and Former President, Tahir A Khaliq, Zubair Motiwala, Haroon Farooki, Anjum Nisar, Vice Chairmen BMG and Former Presidents, Talat Mahmood, Acting President and Junaid Esmail Makda, Vice President rejected the recent move of Government to increase the petrol prices by 9.2 percent.
They suggest the raise as extremely harsh and a frequent one in just two months, another move by Government to satisfy the stern conditions of IMF on its failure to increase a 'justified' tax payer's base. They urged ministry for petroleum and natural resources to reduce the high tax percentage, (39 percent per litre ie Rs 32), doing it would reduce petroleum products prices.
The statement further criticised the steep increase by TDAP for Certificate of Origin fee from Rs 25 to a hefty Rs 1000/- and State Bank's move to increase the rate of export financing from nine per cent to 11 per cent, other New Year Gifts. Both the moves are to discourage exporters. SBP and TDAP are institutions close to business community and understand the harsh conditions prevailing. The raises add another sad slab by government to cripple exports and further destroy the export competitiveness of the country.
The Patron In-Chief and Chairman, Korangi Association of Trade and Industry (KATI), S M Muneer and Johar Ali Qandhari along with Vice Chairmen, Salimu Zaman and Shahid Javed Qureshi said in a statement that government has once again taken a cruel act of increasing POL prices. They said that the government's move is just like stabbing in the back of the country's economy.
"At that juncture when the oil prices had gone to the world's highest at $147 per barrel, the prices of POL did not cross the level of Rs 60 per litre and now when the oil prices are prevailing at less than $80 per barrel the present government has brought the prices to over Rs 80 per litre, which is sheer injustice to the nation and the economy", Qandhari said adding that it clearly shows the POL price increase in Pakistan has no relation with the international oil prices especially when the country produces about 20 to 25 per cent oil indigenously.
He said that the present government is implementing the agreement signed by the former Finance Minister, Shaukat Aziz under which he committed to the IMF to bring the POL prices to over Rs 80 per litre disregarding the oil prices fluctuation internationally.
Chairman Pakistan Pharmaceutical manufacturers Association (PPMA) Haroon Qassim said this step is another nail in PPMA's coffin, the Pharma industry is already suffering due to price control by Minister of Health and no pricing policy and price increase for last 10 years. Pharma industry is already crippling and with this petrol price increase there is no doubt that Pharma industry will be at a great loss.
Pharma industry is already facing high cost of doing business and due to further increase in the petrol price, the industry has further been under immense pressure and is finding hard to stay afloat. The increasing cost of production would further deteriorate the present level of unemployment and export and will create hindrance in achieving export target as well, he added.
Haroon Qassim said that our economy is worsening day by day because of continuous increase in petroleum, gas and electricity prices. Chairman, Pakistan Tanners Association (PTA) Khurshid Alam strongly opposed to the increased of fuel prices in the country, which has now become at the higher side of country's history not only for the general masses, but also for Leather Industry of Pakistan, which would undoubtedly add extra burden on the production cost of the industry to unable PTA's member exporters to be incompetitive in the international market in yielding further export orders of Leather, Leather Garments and Leather allied Products.
He also clarified that most of the Factories/Tanneries in Pakistan have already been shut down owing to increased production cost in the wake of unfavourable/unworkable business mechanism available in Pakistan, which is already causing unemployment in the country, while more than 500,000 peoples are directly or indirectly employed in Leather Industry of Pakistan.
Khurshid Alam appeals in the best interest to " SAVE" the leather Industry of Pakistan for further collapse to withdraw all the above increased in refinance scheme and fuel prices immediately to provide a level playing field to enable PTA's members to continue their effective role more enthusiastically and conveniently in strengthening/boosting the country's economy/exports, which is already in the downward trend.
He also opposed 2% increased in the Rate of Refinance under Export Finance Scheme in compliance with the commitment already made by the Government of Pakistan with IMF. The Chairman, PTA, Khurshid Alam also articulated that IMF had asked the SBP/Government of Pakistan to end subsidies on all export related financing in a phased manner. He emphasised to realise that the Leather Industry of Pakistan is the 2nd biggest export oriented Industry of the country in terms of fetching precious foreign exchange and contributing 5% to the total GDP of the country.