The Faisalabad Chamber of Commerce and Industry (FCCI) has said the fresh increase in prices of petroleum products will add to the already high cost of manufacturing and make it quite difficult to compete in international markets.
The government needed to review the increase in petroleum product prices on a priority basis and relief should be provided to the industry and people, suggested Mian Zahid Aslam, President of FCCI, in a statement on Saturday.
He was of the view that the rise in oil prices would directly impact prices of other products, ranging from transport fares to industrial products including daily necessities as well as services. “This will leave a painful impact on the ordinary citizen, who is suffering a lot due to cost-push inflation,” he said.
Believing that the economy is entering a revival phase after a long stagnation, Aslam, however, cautioned that the increase in production cost could slow down industrial activities and undermine prospects of economic growth. This would also increase unemployment and poverty, which was already high in the country, he said.
He pointed out that stability in input and utility costs was a key to making long-term business and industrial expansion plans. But frequent and high increase in oil prices could shatter the confidence and paint a negative picture, discouraging local and foreign investors.
As per international practices, he suggested, fiscal space should be created in the budget to absorb the increase in international oil prices to offset or reduce the impact.
Industry people argue that energy crisis, deteriorating law and order situation and high input cost along with depreciation of the rupee have already hurt the industrial activity and economic growth. A slight increase in oil prices will multiply the cost of doing business, hitting industrial productivity and export competitiveness and depriving the country of foreign exchange earnings, they say.
Published in The Express Tribune, August 4th, 2013.
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