LAHORE: The Pakistan Industrial and Traders Associations Front (PIAF) has demanded of the government to withdraw the massive increase of Rs35 per liter in petroleum prices with immediate effect, as the cruel conditions of IMF for the release of its delayed loan tranche would destroy the trade and industry totally.
In a statement on Monday, Chairman PIAF Faheem ur Rehman Saigol said that federal government has announced an abnormal increase of petrol and High Speed Diesel prices by Rs35 per litre for first half of Feb a couple of days earlier instead of waiting for the end of the month, which is very unfortunate and shows writ of the government is very weak.
He said that inflation is on higher side due to the impact of government’s economic policies of soaring fuel rates, enhancing power and gas tariff, depreciating the local currency and imposing exorbitant duties on imported industry raw material.
Faheem Saigol urged the government to take concrete measures for easing out inflation that has further increased due to rise in oil prices and other essential commodities.
He said that oil prices and inflation are closely connected in a cause-and-effect relationship. As fuel rates move up, inflation, which is the measure of general price trends throughout the economy, follows in the same direction upward. On the other hand, if the rates of fuel fall, inflationary pressures start to drop.
The PIAF Chairman said that the high speed diesel is used mostly in the transport and agriculture sectors. Therefore, any increase in its price will lead to inflationary impact. Kerosene oil price has also gone up, which is used in remote areas where liquefied petroleum gas is not available for cooking purposes. So, any increase in its price will have an impact on the life of the poor. The price of light diesel oil has been hiked, which is used in industries and its price also goes up.
The business leader said that the decision would prove detrimental to the industries due to high cost of doing business and will also open the floodgates of inflation. In addition to making the electricity bills costlier and unaffordable for the consumers, the unexpected hike in oil prices would escalate prices of all household goods being widely used across Pakistan, he added. He said that the burden of the surge in oil price in the international market is immediately transferred to masses by the government but the process of reduction in the prices is always very slow.
He said that Pakistan’s industry had been harmed by the high cost of doing business, which discouraged investment in capacity and capability and called for easing the burden of heavy taxes on the power sector.
Faheem Saigol said that the SMEs are striving to deal with the economic crunch and need to get support. Instead of providing subsidies or waivers, it is unjust to overburden the industries with a hike in the cost of production. An increase in petroleum products costs will further weaken the economic environment which is already under threat on various fronts.
He called for putting the economy on a balanced and sustainable growth trajectory, addressing the underlying structural vulnerabilities, as low export growth, limited foreign exchange reserves, documentation of economy and higher food inflation are still major challenges to the economy.
The PIAF Chairman asked the Ministry of Finance to devise a strategy to control and ease out the impact of inflation. He said that the outcome of stabilization policies, agriculture sector interventions, rigorous monitoring at federal and provincial levels and favourable weather can bring in better results in easing out inflation and sustain the economy towards growth and productivity.
