KCCI flays hike in petroleum prices

Staff Reporter BOL News

16th Oct, 2021. 05:56 pm
Mamnoon Hussain

KARACHI: Businessmen Group (BMG) chairman and former president of the Karachi Chamber of Commerce and Industry (KCCI) Zubair Motiwala has appealed to the government to subsidise the impact of the international oil prices, a statement said on Saturday.

The increase in petroleum prices would not only affect the overall economic performance but would also intensify the hardships for businesses and the masses, he added.

Expressing dismay over exorbitant hike in petrol prices by Rs10.49/litre he said the masses were already overburdened because of inflation and their budgeting would be further disturbed due to a hike in the petroleum prices and also a raise the electricity tariff.

“The present government always desired that the cost of doing business is reduced but all these steps are in contrast to the policy of the government, as the nation nowadays suffers badly due to frequent hikes in petroleum prices, electricity and gas tariffs and other utilities, in addition to fluctuating exchange rates and higher duties on imports,” Motiwala said.

It was a matter of concern that the winter season has not yet arrived in Karachi but gas supply to the compressed natural gas (CNG) filling stations has been suspended for 10 consecutive days.

He said: “We are well-aware that the international oil prices were on the higher side but the impact must not be passed on to the public, as was done in the past. The petrol and diesel prices in Pakistan peaked at Rs87 and Rs65/litre during the historically highest-ever international crude price of $147.27/barrel in July 2008 and now when it was around $85, the petroleum prices have been raised to a whopping Rs137.79/litre, which was beyond our understanding.”

Referring to severe devaluation of the rupee against the dollar, Motiwala said that the rupee was seen devaluating by approximately 12.4 per cent against the dollar from Rs152.30 on May 17, 2021 to around Rs171.20 as of October 16, 2021.

“Severe devaluation of [the] rupee has raised the cost of doing business and fostered inflation; therefore, it is really crucial to review the current strategies being pursued by the economic managers.”

“The government needs to understand that the share of exports in GDP stood at 8 per cent, while the remaining 92 per cent was local trade and imports; hence, the devaluation is hurting and has reached to a level where it has become unbearable,” he added.

Motiwala stressed that the emerging situation has to be efficiently addressed and handled carefully, otherwise the rising petroleum prices and excessive devaluation will continue to increase the cost of doing business, which would terribly affect the industrial performance, raise unemployment and open the floodgates of inflation, particularly for the middle and lower segments of the society.

“The inflation monster needs to be effectively controlled,” he said, adding that an increase in the electricity tariff was probably due to “Take or Pay Agreements” with the Independent Power Producers (IPPs) so the brunt of the policy should not be put on the people of Pakistan.

He also underscored that the import substitution industries, Small and Medium Enterprises (SMEs), small traders and shopkeepers, who are the backbone of the economy, cannot bear such shocks.

The federal and provincial governments must help them by providing loans at zero per cent interest rate for their survival, otherwise they will become bankrupt.

He expressed the hope that the federal government would realise the gravity of the situation and accordingly take steps to stop further devaluation of the rupee against the dollar and also look into the possibility of subsidising the petroleum prices, as was done in the past.

Meanwhile, KCCI president Muhammad Idrees appreciated the Sindh government’s decision to lift the restriction imposed on carrying out businesses on Sunday, which was earmarked as Safe Day, and said that the business community was very happy to see that Businessmen Group chairman Zubair Motiwala fulfilled his commitment to small traders/shopkeepers within 24 hours by successfully convincing the Sindh government to allow business activities on Sunday.

“[The] KCCI warmly welcomes the Sindh government’s notification in which businesses have been allowed to operate on Sundays, which would certainly help in minimising the grievances being suffered by the shopkeepers who underwent severe losses due to the Covid-19 pandemic and subsequent lockdowns,” he added.

Idrees said that by promptly and affirmatively responding to the BMG chairman’s request, Sindh Chief Minister Syed Murad Ali Shah has proved that Sindh is undoubtedly a people-friendly government, which, despite so many challenges, tries its best to somehow provide relief to the public whenever possible.