Business leader blasts hike in petroleum prices

KARACHI: The latest hike in the prices of petrol and diesel will have a multiplier effect on goods transportation costs which will drive the commodities and food supplies prices even further, an official said.

The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Acting President Shabbir Hassan Mansha expressed his shock and awe at the significant increase in the prices of petrol and diesel.

The increase in petrol price by Rs24.03/litre and Rs59.16/litre in diesel will crush the masses, he added.

The FPCCI acting chief maintained that it is imperative to weigh in the impact of the prior petroleum prices as well because even before the latest increase, prices were raised twice in a short time span of merely two weeks.

“We are faced with a third major raise in the prices of petroleum products within 20 days, cumulatively raising the petrol price by Rs84/litre, or 56 per cent and diesel price by Rs144/litre, or 83 per cent.”

Mansha apprised that a massive goods transportation crisis is in the offing as there is no way the transporters can absorb the 83 per cent hike in the diesel price.

He also pointed out that there are reports that the government is also mulling the proposal to re-impose petroleum development levy (PDL) and the business community is not sure where this anti-business upward price spiral will stop.

Mansha emphasised that the real impact of the petroleum prices will reflect in consumer price indices in 4 to 8 weeks and the government should swiftly come up with a protective mechanism for the small and medium enterprises (SMEs) or else the skyrocketing increase in cost of doing business will push the country towards historical bankruptcies in the SMEs and the resultant unprecedented unemployment.

The FPCCI acting chief also expressed his concerns regarding the massive electricity tariff hike of Rs7.91/unit resulting in Rs24.82/unit base tariff for the year 2022/23, while it was Rs16.91/unit for the outgoing year 2021/22.

Additionally, rumors are rife that there will be further raise in the electricity tariffs and, the combined effects of petroleum, electricity and gas prices will make businesses unsustainable and unviable, he added.

Mansha extended the FPCCI’s full support of the apex body to kick start a consultative process between the government and all the stakeholders to work out some operational contingencies under the prevailing cost of doing business crisis.