The recent hike in fuel prices by Rs60 per litre within a span of 10 days is going to adversely affect the business community as businesses are losing any incentive of operating in Pakistan due to the increasing cost of operation.
Pakistan Businesses Forum (PBF) has rejected outright the historic increase in prices of petroleum products, calling the move unprecedented and asking the government to revise its decision, keeping in view the fragile condition of business and industry and the country’s ailing economy.
“The revised petroleum prices and the revised tariff announced by Nepra, to be effective from July 1, will not only squeeze the salaried class and the industry, but will also increase the miseries for the common man,” PBF Vice President Ahmad Jawad said while talking to The Express Tribune.
“The historic hike of Rs60 per litre in oil prices within a span of 10 days is venomous for the economy and is against the business and industry.”
Instead of undertaking urgent reforms, the government chose the easiest path, Jawad remarked, adding “for taking just $1 billion in loan from the IMF, which will be received in July, we have initiated a strong wave of inflation in the country”.
Pointing to the free float exchange rate policy, he called it the mother of all evils while forex traders were enjoying good profits on a daily basis.
The PBF VP demanded that the government should cut its expenditures in the coming budget and opt for substantial austerity measures.
Similar views were echoed by Employers Federation of Pakistan (EFP) President Ismail Suttar.
“The hike in fuel prices by Rs60 per litre within a short span of time is going to adversely affect the business community as overnight the businesses are losing feasibility of operating in Pakistan due to the increasing cost of operation,” he said.
Suttar cited announcements by several companies such as Airlift, Careem, SWVL and others, which “have drastically cut their operations while some have gone for downsizing, leading to unemployment in the country”.
Amid global recession, the massive increase in prices of fuel and electricity led to rise in prices of several goods and services, Suttar said, adding that the price hike had triggered inflationary concerns.
He was of the view that the government, which was striving to improve the country’s balance of payments position, should evaluate the steps it was taking as they might severely damage the business landscape.
High fuel and electricity prices coupled with surging prices of commodities worldwide are adversely affecting business operations, as the cost of raw material and operation is surging.
“This is not an effective solution in the long run and thus the government must take several other measures as well to counter the unstable economy,” Suttar suggested.
“The price hikes will be a terrible blow to the entire logistics, which will affect the supply chain,” commented UNISAME President Zulfikar Thaver.
“It will also affect the farming sector and increase the cost of production. Transporters have already raised their fares and a new tide of inflation will emerge that has never been witnessed before,” he predicted.
Published in The Express Tribune, June 5th, 2022.
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