‘Weekly oil price revision causes inflation’

Industries suffer losses due to varying costs of production: FCCI.


Our Correspondent October 08, 2012

FAISALABAD: The weekly oil price revision is causing an inflationary impact, which is detrimental to the national economy, said Mian Zahid Aslam, President of Faisalabad Chamber of Commerce and Industry (FCCI).

Industrialists suffered millions of rupees in losses due to the weekly revision mechanism as it kept costs of production variable, added Aslam.

He said that Pakistan is a developing country and the weekly mechanism was not practical as it only suited developed economies. He added that the government should keep the diesel price comparatively lower as it was used as an input for industries and agriculture.

He called the weekly revision a new weekly budget for the economy. The price variation in international markets was neither a new practice nor Pakistan was the only country affected by this. Many countries kept the price impact flexible in their budget formulation, he said.

Aslam suggested that such price variations might be absorbed by the taxes levied on petroleum products to keep the prices stable. He emphasised that the government should scrap the weekly price revision as industries were already operating at 30% of installed capacity and the business community was directly affected by uncertainty in product feasibility costs.

Published in The Express Tribune, October 9th, 2012.

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