KARACHI: President Karachi Chamber of Commerce & Industry (KCCI) Mohammed Tariq Yousuf, while expressing sheer dismay over exorbitant upsurge in petrol and diesel prices by Rs17.50 and Rs20 per litre, respectively, stated that this extraordinary increase in fuel prices was totally unbearable for all segments of society including the business & industrial community, as it would open up a floodgate of inflation and intensify the hardships for industries whose businesses had already been going down because of extremely high cost of doing business.
He said that the industries were already battling to keep their production activities alive, as recently KE’s base power tariff was raised by Rs7.5 per unit which was followed by another increase of Rs2.31 per unit on account of Fuel Cost Adjustment (FCA) and now the unbearable hike in prices of petroleum products would terribly affect the overall production activities and leave a very deep scar on the already ailing economy.
He noted that on 1st January 2023, petrol price stood at Rs214.80 and within eight months it has skyrocketed to all-time high of Rs290.45 whereas within the last two fortnights, petrol price has been raised continuously, resulting in an upsurge of Rs40 per litre within a month which would have serious repercussions as it is a well-known fact that any upsurge in petroleum price directly affects almost all the household commodities and the cost of finished goods.
He was of the opinion that the trade and industries were already overburdened due to exorbitant production cost triggered by hike in power tariff and petroleum prices which was the basic reason why 50 percent of the industries, who were carrying out production activities by utilizing KE’s electricity have already closed down whereas the remaining were battling for survival. “We fear that the rest of 50 percent industries would also shut down soon due to exorbitant energy tariffs.”
The government must take cognizance of the gravity of situation and take serious steps to bring down the cost of industrial inputs including electricity, gas, petroleum products; otherwise, neither the economy nor the businesses would be able to stay afloat, he added.
Keeping in view the hardships being faced not only by the industries but also by the poor masses in the ongoing era of inflation, Tariq Yousuf asked the government to take solid steps for bringing down the petroleum and electricity prices which have reached to a backbreaking level.
“People are extremely perturbed and becoming hopeless with every passing day. Even the white-collar people are unable to overcome their domestic expenditures” he noted, adding that the alarming situation calls for prompt action so that the wheels of industries could keep on spinning and the poor masses could be saved from hunger and starvation.
Separately, President of the Korangi Association of Trade and Industry (KATI) Faraz-ur-Rehman said that the rising petroleum prices will further strained the economy, threatening industries and employment. The decision by the caretaker government to escalate the price of petroleum by 17 rupees 50 paisa and diesel by 20 rupees has dismayed the trade and industry, he said.
Reiterating his concerns, Rehman highlighted that the consecutive surge in fuel prices is exerting mounting pressure on the country’s economy, subsequently leading to an increase in unemployment.
Faraz-ur-Rehman said that the cumulative impact of these price hikes is disproportionately affecting the underprivileged segments of society, pushing them deeper into financial hardship and propelling them below the poverty line. He pointed out that the prevailing inflationary pressures have already taken a toll on the lower-income groups.
The President of KATI emphasized that the recent price escalation would deal a significant blow to industrial operations, potentially causing a surge in unemployment figures across the nation.
Rehman noted that the spike in energy costs was contributing to financial burdens faced by the working class and the impoverished. He attributed this to rising public transportation fares, increased electricity and gas bills, and a surge in overall food costs, further exacerbating the ongoing inflationary crisis.
He said price hike is affecting not only those belonging to the low and middle-income brackets but also the business community. He highlighted that the incessantly rising energy prices would trigger a domino effect, resulting in higher transportation costs for goods and adversely impacting industries dependent on cargo shipping and freight services. Such unprecedented cost increments, he pointed out, could prove detrimental to the industry’s ability to stay afloat.
To address these challenges, Faraz-ur-Rehman urged the government to urgently prioritize the implementation of renewable energy initiatives. He noted that such projects often require an extended timeline for completion and stressed the importance of starting them promptly to mitigate the impact of energy price escalations.
He said that the current grim scenario where increasing inflation, coupled with soaring electricity, fuel, and gas prices, has culminated in dwindling job opportunities, industrial closures, and a discernible decline in foreign investment.
Expressing concern about the nation’s developmental trajectory under such circumstances, Rehman called for the establishment of a comprehensive governmental framework aimed at controlling production costs and curbing inflation.
He criticized the government for imposing petroleum levies and taxes as per the International Monetary Fund’s (IMF) stipulations, a move that has significantly affected the public budget.
He expressed optimism that the caretaker government would take cognizance of the challenges faced by the populace and initiate appropriate measures to alleviate their predicaments.
However, as the debate over escalating energy prices continues, it remains to be seen how the authorities address these pressing concerns and navigate the intricate economic landscape.
Copyright Business Recorder, 2023
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