Business community urges govt to review hike in POL products’ prices

KARACHI: Reacting to the government’s decision to hike the prices of petroleum products, business community has urged the government to review its decision as it will have multiple impacts on the cost of doing business as well as financial condition of middle and lower income groups.

Shabbir Hassan Mansha, Acting President FPCCI, has expressed his shock and awe at the astronomical increase in the prices of petrol and diesel. Increase in petrol price by Rs 24.03 per litre will crush the masses and Rs. 59.16per litre in diesel price will have a multiplier effect on goods transportation costs; which will drive the commodities and food supplies prices even further, he added.

FPCCI acting chief maintained that it is imperative to weigh in the impact of the prior petroleum prices as well; because even before the latest increase prices were also raised twice in a short time span of merely two weeks.

Therefore, we are being faced with a third major raise in the prices of petroleum products within 20 days – cumulatively raising the petrol price by Rs 84/litre, i.e. 56 percent and diesel price by Rs. 144 per litre, i.e. 83 percent. Shabbir Hassan Mansha has apprised that massive goods transportation crisis is in the offing as there is no way the transporters can absorb 83 percent raise in the diesel price.

He has called upon the government to act and act fast. Shabbir Hassan Mansha also pointed out that the grapevine is that the government is also mulling the proposal to re-impose petroleum development levy (PDL) and the business community is not sure where this unpredictable, aggressive and anti-business upward price spiral will stop.

Shabbir Hassan Mansha emphasized that the real impact of the petroleum prices will reflect in consumer price indices in 4 – 8 weeks and the government should swiftly come up with a protective mechanism for the small & medium enterprises (SMEs); else the skyrocketing increase in cost of doing business will push the country towards historical bankruptcies in the SMEs and the resultant unprecedented unemployment.

Acting FPCCI chief also expressed his profound concerns over massive electricity tariff hike of Rs 7.91 / kWh; resulting in Rs. 24.82 / kWh base tariff for the year 2022 – 23, while it was Rs. 16.91 / kWh for the outgoing year 2021 – 22. It was a rate hike of a staggering 47 percent by NEPRA; and, it will jolt the cost of doing business and ease of doing business indices.

Additionally, rumours are rife that there will be even further raise in the electricity tariffs; and, the combined effects of petroleum, electricity and gas prices will make businesses unsustainable and unviable, he added.

Shabbir Hassan Mansha has extended FPCCI’s full support from the platform of the apex body to kick start a consultative process between the government and all the stake holders to work out some sort of operational contingencies under the prevailing cost of doing business crisis.

Korangi Association of Trade and Industry (KATI) President Salman Aslam has rejected the government’s decision to increase petrol by PKR 24 and diesel by Rs56. The continuous rise in the prices has not only putting financial strains on the poor but also it gives them mental stress that reflects in their productivity. It shut down industries and creates a storm of unemployment in the country.

Salman Aslam said that the energy prices put pressure on labour class in number of ways as most of labour class travel in public transport which use diesel as fuel, so when price of diesel increase it also increase the fare of public transport and cause the burden on common man. On the other side due to rise in energy prices food inflation increases and it also increase utility bills that put financial burden on the common man.

The president also added that in such scenario if the energy prices continue to increase like this for next three months than consequences would become more severe not only for the lower and middle income group but also for business community.

The rise price will also increase the transportation cost for the freight carrier to transport goods, the shipper is charged more to transport those goods to make up for the increased costs.

President KATI demanded the government to immediately start project of renewable energy resources as their completion required long time to become operational.

He also appreciated the announcement of Wind and Solar energy project by Sindh government.

Copyright Business Recorder, 2022