Oil, gas prices may rise up to 10% due to rupee’s fall

Published: December 12, 2017
CNG body says depreciation is aimed at pleasing IMF, exporters. PHOTO: AFP

CNG body says depreciation is aimed at pleasing IMF, exporters. PHOTO: AFP

ISLAMABAD: An association of compressed natural gas (CNG) dealers has voiced fear that letting the rupee fall against the US dollar will lead to a price hike in petrol and gas – cumulatively the largest commodities imported into the country.

“The dollar’s strength will increase poverty and jack up costs of all projects including the economic corridor,” cautioned All Pakistan CNG Association central leader Ghiyas Abdullah Paracha in a statement on Monday.

He pointed out that energy was the largest import commodity and erosion in the currency exchange rate would push up energy prices which had already started increasing in the international market.

OGRA proposes Rs1.48 per litre increase in petrol price

“The price of oil and gas will be increased by 7-10% if the rupee continues to fall … it will damage industrial and agricultural production and affect almost every citizen of the country. The decision to let the rupee weaken should be taken back,” he said.

Paracha was of the view that the rupee’s stability was being compromised to please the International Monetary Fund (IMF) as well as exporters, who had become addicted to incentive packages and depreciation.

OGRA proposes Rs2.96 per litre increase in petrol price

He suggested that exporting industries should not seek assistance from the government, rather they should improve their competitiveness.

He emphasised that economic problems required structural reforms.

Published in The Express Tribune, December 12th, 2017.

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Reader Comments (2)

  • reality check
    Dec 12, 2017 - 8:09PM

    Pakistan doesn’t have the hard currency to artificially support the rupee and the American economy is getting stronger by the day. Higher prices for imported items is going to be the norm. Those price rises would have taken place gradually had the govt let the rupee float way back when – but govt has been supporting rupee for so long that move towards market driven currency will likely mean 20 percent increases. Recommend

  • Ash Man
    Dec 14, 2017 - 8:49PM

    Looking at the balance of payments situation , if exports don’t move up dramatically, the rate of 140 by June 2020 put up by some analysts does no longer seem outlandish. Recommend

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