Fuel price hike could downsize cottage industry production

KARACHI: The fresh fuel price hike is feared to downsize the existing weak production of cottage industry by 30 per cent in the country as such impact is likely to trigger unemployment and spur the prices of new products upward on the local market, traders said on Monday.

Traders criticised the government for the new increase, saying the expensive fuel has weakened the prospects for trade and industry growth. They said the industry output suffered utmost because of the present regime “unviable” policies in the last five years.

Talking to Business Recorder, President All Pakistan Organization of Small Traders and Cottage Industry, Mehmood Hamid cast a bleak forecast for the survival of cottage industry in particularly after fuel price went up, phenomenally.

The fresh increase in fuel prices pushed the patrol to Rs105.55 a litre, diesel high speed Rs112.13, diesel light Rs98.84, and kerosene oil to Rs102.21, he said, adding that mammoth inflation is now all set to “cripple” the cottage industrial output. The trigger-down effects of fuel price surge will soon hit the consumers, he said, adding that increase in fares of transportation is expected as such blow to occur first. He also feared sales of scores of products made at cottage units will also become dearer shortly.

“The local products of the cottage industry will become more expensive in the face of same cheap imported Chinese products on the local which is largely expected to hit the local manufacturers badly,” pointed out Hamid. He said electricity in India and China is cheaper whereas the power tariff is much higher to the neighbouring nations, adding that the flood of products from both countries will have “extremely” negative impacts on the local industries.

He said the public and freight transportation cost are also expected to skyrocket after the fresh fuel increase, which will increase the prices of products. He said the garment industries of Pakistan are feared to suffer from the fresh blow of fuel hike, which is already moving towards closure. “Chinese garments have already caused a downturn to the local industries while the fresh hike in petroleum prices are feared to further slow down the output,” he said, adding that the poor industrialists will be amongst the chief sufferers from dual impacts.