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LAHORE: The Pakistan Industrial & Traders Associations Front (PIAF) has observed that the impact of falling oil prices should also be seen on other commodities, including power tariff, as the inflation continued to damage trade and industry on an annualized basis at 33.16 percent.

PIAF Chairman Faheem Ur Rehman Saigol, and senior vice chairman Haroon Shafique Chaudhary and vice chairman Raja Adeel Ashfaq, said that cut in fuel prices is a good decision but now government would have to show its management and administrative powers to implement this relief measure in other sectors too.

Faheem Saigol said that most of the power is generated through thermal sources so the decline in fuel prices should also be seen in lowering energy tariff, as their cost has been reduced. Moreover, transportation fares and rates of other commodities should also be reduced accordingly through the writ of the district and provincial authorities, he added.

The PIAF Chairman said that industries need low cost energy to bring down their cost of production, keeping their goods competitive in the international market.

Quoting the latest data released by the Pakistan Bureau of Statistics (PBS), he said that year-on-year increase in sensitive price indicator (SPI) was due to spike in prices of diesel (141.46 percent), petrol (119.61 percent), onions (89.33 percent), pulse masoor (88.6 percent), vegetable ghee 1kg (78.92 percent), mustard oil (75.72 percent), cooking oil 5 litre (73.01 percent), vegetable ghee 2.5kg (72.44 percent), washing soap (59.93 percent), chicken (52.61 percent), gents sponge chappal (52.21 percent), pulse gram (51.14 percent), garlic (40.54 percent), LPG (39.95 percent), and pulse mash (31.01 percent).

He said that weekly inflation was flat but this trend would depend upon energy price adjustments.

Government has cut petroleum prices, which would bring down inflation. However, likely electricity and gas price adjustments might push the index up, he said.

He warned that CPI reading is yet to peak, which came in at 21.3 percent in June. It is likely to reach 24-25 percent soon.

June’s CPI numbers depicted the tough days currently being faced by the most vulnerable segments of the population. People have been seething with the high cost of commodities, particularly fuels and power, which make up a large percentage of the SPI basket.

He said that Pakistan exports cannot compete with China, Bangladesh and India where power tariffs were 7-9 cents, as the country’s exports may witness a major setback in present days due to high cost of electricity, which has become a major stumbling block in industrial development and boosting exports.

He said that fuel and electricity are regarded as the lifeline of any economy and play a pivotal role in socioeconomic development.

He observed that the government, in present circumstances, would have to reduce the price of electricity along with the cut in the prices of petroleum products further to bring down the cost of doing business and to promote industrial activities.

PIAF senior vice chairman said that business activities were already in decline and in this situation the government should take serious steps to cut the cost of doing business, as recent hike in power rates would further enhance the cost of production.

He observed that the burden of the surge in oil price in the international market is immediately transferred to masses by the government but the process of reduction in the prices is always very slow.

Copyright Business Recorder, 2022

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