LAHORE: While the public was waiting to benefit from appreciation of Pak rupee against dollar in terms of home appliances and automobile prices, unprecedented increase in the prices of metals hit the industry all over the world and Pakistan is no exception.
It is now up to government to lower some of its levies on these products so that the prices can be checked and consumers should be given relief, industry experts suggested that with each and every price increase the burden on both the industry and consumer is witnessed while the government share always increases thru different levies which should be lowered down.
It is worth mentioning that apart from the bodies of many home appliances like refrigerator, microwave ovens, washing machines as well as most automobiles today are composed of 57% steel, 7% iron, 8% plastic, 8% aluminium, and other materials account for the remaining 20%. All these materials are constantly surging this year and it has become really difficult for automakers all over the world to absorb the impact and they are forced to increase the prices of their manufactured cars.
As per data, since September 2020, the Pak rupee strengthened against dollar by almost 11%, as dollar fell from Rs 167 to Rs 151. However, several raw materials such as steel have become super expensive as EG, Cold Rolled Coil (CRC) and Hot Rolled Coil (HRC) increased from Rs 160, 151 and 111 per ton respectively in September 2020 per ton to Rs 349, 331 and 290, increasing by 118, 119 and 161 percent respectively which is extraordinarily high by any stretch of imagination. Similarly, copper prices rose on increased demand. Lately, copper reached $10,008 per ton which is the highest since February 2011. In fact, it has more than doubled in a year from $4,800 per ton in March 2020. The prices of Aluminium are also being strengthened in the wake of recovery of the world economy from the impact of the Covid-19 and the trend will impact domestic aluminium prices in the long-run.
“The pressure of this surge in raw material was enough to make automakers all over the world increase the prices of their products,” said S M Ishtiaq Siddiqui, CEO SM Engineering.
For example, he added, Volvo Car India increased prices of most of its products by up to Rs 2 lakh earlier this month with immediate effect in order to partially offset the impact of rising input costs.
Earlier, Maruti Suzuki, Nissan, Renault, Hyundai, Ford, Kawasaki and Hero Honda raised prices in April 2021, ranging from INR 2500 on motorcycles to INR 33,000 on cars, and it was the third price increase by some of these manufacturers in just four months.
“We have also experienced this phenomenon locally as recently a number of industrial products including commodities recorded substantial increases in their prices in the country,” he added.
Copyright Business Recorder, 2021