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KARACHI: Business community, dismayed over hike in petroleum prices, devaluation of rupee and unbearable inflation, appreciated Sindh government's notification for allowing businesses to operate on Sunday

Chairman Businessmen Group (BMG) and former President Karachi Chamber of Commerce & Industry (KCCI) Zubair Motiwala, while expressing sheer dismay over exorbitant hike in petroleum prices by Rs10.49 per litter, appealed the government to subsidize the impact of international oil prices as the increase in petroleum prices would not only affect the overall economic performance but would also intensify the hardships for businesses and common man who were already overburdened because of inflation.

"The sitting government has always desired that the cost of doing business is reduced but all these steps are in contrast to that policy of the government as the nation nowadays suffers badly due to frequent hikes in petroleum prices, tariffs of electricity, gas and other utilities in addition to fluctuating exchange rates and higher duties on imports," he said.

He said that it was a matter of grave concern that the winter season has not yet arrived in Karachi but the gas supply to CNG stations has already been suspended for 10 consecutive days.

He said, "We are well-aware that the international oil prices were 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 litter during the historically highest ever international crude price of $147.27 per barrel in July 2008 and now when it was around US$85, the petroleum prices have been raised to a whopping Rs137.79 per litre which was beyond our understanding."

Referring to severe devaluation of Pakistani rupee against dollar, Zubair Motiwala said that the rupee was seen devaluating by approximately 12.4 percent against US Dollar from Rs152.30 on May 17, 2021 to around Rs171.20 as on October 16, 2021. "Severe devaluation of rupee has raised the cost of doing business and fostered the inflation; therefore, it is really crucial to review the current strategies being pursued by the economic managers."

The government needs to understand that the share of exports in GDP stood at 8 percent while the rest of 92 percent was local trade and imports; hence, the devaluation is hurting and it has already reached to a level where it has become unbearable," he added.

He stressed the need that the emerging situation should be efficiently addressed and handled very carefully; otherwise, the rising petroleum prices and excessive devaluation will continue to increase the cost of doing business, which would terribly affect the industrial performance, raise unemployment and open the floodgates to inflation, making life harder particularly for the middle and lower segments of the society, besides making the poor the poorer.

He further opined that 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 consumers of Pakistan.

He also underscored that the import substitution industries, SMEs, small traders and Shopkeepers who were the backbone of economy cannot bear such shocks. The federal and provincial governments must help them out by providing loans at zero percent interest rate for their survival; otherwise, they will become bankrupt soon.

He hoped that the Federal Government would realize the gravity of the situation and accordingly take steps to stop further devaluation of rupee against the US dollar and also look into the possibility of subsidizing petroleum prices as done in the past.

President KCCI Muhammad Idrees, while appreciating the Sindh Government's decision to lift the restriction imposed on carrying out businesses on Sunday which was earmarked as Safe Day, stated that the business community was very happy to see that Chairman Businessmen Group Zubair Motiwala fulfilled his commitment to small traders/ shopkeepers within 24 hours by successfully convincing the Sindh government to allow business activities on Sunday.

"KCCI warmly welcomes Sindh Government's notification in which businesses have been allowed to operate on Sundays which would certainly help in minimizing the grievances being suffered by shopkeepers who underwent severe losses due to COVID-19 pandemic and subsequent lockdowns," he added.

He said that by promptly and affirmatively responding to Chairman BMG's request, Chief Minister Sindh has proved that the Sindh government was undoubtedly a people-friendly government which despite so many challenges tries its best to somehow provide relief to the public, whenever possible.

Korangi Association of Trade and Industry (KATI) President Salman Aslam has rejected the rise in prices of petroleum products, which have reached the highest level in the history of Pakistan. He appealed to Prime Minister Imran Khan to reverse the recent rise in prices of petroleum products. Industrialists cannot afford record high production costs and the worst inflation due to an increase in petrol prices.

Salman Aslam further said that the recent increase would not only affect the industrialists but also the people.

President KATI said that the crisis caused by the corona virus has already affected industrial and business activities and the people are already under economic pressure. In such a situation, more steps need to be taken to provide relief.

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

Salman Aslam said that increase in petrol prices would also increase the prices of electricity and food items. He said that the recent increase would not only make the means of transportation more expensive but also increase the prices of industrial transportation which would lead to a new storm of inflation in the country.

He said that the government should take decisions keeping in view the capabilities of the people and industrialists and take steps to control the storm of inflation.

Copyright Business Recorder, 2021


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