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KARACHI: Business community has reacted sharply over increase in petroleum prices and highlighted that businesses already grappling with severe inflationary pressures, are now facing the looming threat of closures. This exorbitant increase will deliver a severe blow to Small and Medium-sized Enterprises (SMEs) and cottage industries.

Muhammad Suleman Chawla, Acting President FPCCI has strongly rejected the massive hike in the prices of petroleum products effective from August 16, i.e. petrol by 6.4 percent or Rs 17.50 per litre to make it 290.45 and high speed diesel by 7.3 percent or Rs20 per liter to take it to 293.40 per litre.

Chawla explained that the apex body forewarned the authorities many times over the last few months that they need to address the teething problems in the import of the Russian crude, i.e. handling of oil cargoes; adjustments required vis-a-vis refining processes and commercial transactional procedures to settle oil payments.

Nevertheless, the authorities failed to listen to us; else, we would have more Russian crude by now, which is cheaper by a whopping 35-40 percent as compared to international markets today, he added.

Chawla particularly highlighted that the international oil markets are in a flux and instability; and, all national and international notable economists agree that the demand for the petroleum products internationally will remain low for a couple of years to come due to slowing down of the global economy.

Engr M A Jabbar, VP FPCCI, reminded that just two week ago, the authorities have announced Rs 7.50 per kWh raise in electricity prices and just about the same raise as today, in petroleum products, i.e. 6-7 percent, despite FPCCI’s repeated demands that electricity and petroleum prices should be stabilized by curtailing the distribution & line losses and reducing systemic inefficacies. Engr Jabbar also questioned that how the export orders-in-hand can be met in a profitable manner after the triple blow of electricity tariff increase and petroleum price hikes twice within a short-span of 2 weeks – resulting in uncertainty and price instability.

Mian Anjum Nisar, former president FPCCI has expressed his profound concerns that domestic and international demand for Pakistani products will be at an all-time low as inflation has severely affected the purchasing power of the domestic consumers and, for international & regional markets, Pakistani products have become uncompetitive by a large margin.

Mian Nasser Hyatta Maggo, immediate past president FPCCI, recalled that the government has missed all macroeconomic indicators and their targets for FY23 and, for FY24 as well, these continuing bad economic decisions will have a lasting effect on all economic performance indicators – be it exports, industrial production, inflation, employment generation and revenues.

Copyright Business Recorder, 2023

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