Daily Times

KARACHI: Increase in petroleum prices will increase the cost of doing business, termed representatives of prime industrial and export-oriented value addition sector of the country.

The government has raised the price of petrol from Rs 71.29 per litre to Rs 73 per litre and high-speed diesel to Rs 82 per litre with an increase of Rs 1.52 per litre.

Within the past 16 days, the prices of petroleum products have twice witnessed an upward revision and, while it is the fourth consecutive hike in 32 days.

This act of the government will increase the cost of production ultimately. In the past, the government did not pass on the full benefit of declining oil prices in the international market to the public.

Representatives of All Pakistan Textile Mills Association, Pakistan Tanners Association (PTA), Pakistan Apparel Forum (PAF), Pakistan Yarn Merchant Association (PYMA), Pakistan Cotton Ginners Association (PCGA), Surgical Instruments Manufacturing Association Pakistan (SIMAP), All Pakistan Marble Mining Processing Industry and Exporters Association (APMMPIEA), All Pakistan Business Forum (APBF) and other trade organisations said it could have been an appropriate step that the government provided relaxation on duties and absorbed the burden of soaring petroleum prices in the international market by keeping the prices stable.

Agha Saiddain of PTA, Jawed Bilwani of PAF, Ghulam Rannabi of PYMA, Rana Abdul Sattar of PCGA, Sanaullah Khan of APMMPIEA and Ibrahim Qureshi of APBF were of the view that though prices of petroleum products in global market were going up, the Pakistani government could keep the rates stable by reducing tax ratio, which is highest in the region.

In the past, the government used to cut POL rates after a period of one month following declining of prices in the global market, but now, at the time of rising oil prices, the government was quickly responding and shifting burden of oil price increase within after every 15 days.

The country’s industries, which were already facing a number of challenges, would suffer extra following this act, they said.

It may be mentioned here that the rates of kerosene oil and light diesel oil were also increased from Rs 43.25 per litre to Rs 44 per litre and from Rs 43.34 per litre to Rs 44 per litre, respectively.

They said the business community had always been calling on the government circles concerned to take measures for promotion of alternative fuels, as trade deficit was fast widening due to heavy imports under the head of petroleum products. The rise in petroleum products’ prices is bound to give a further blow to the industry, they lamented.

They said that the government’s announcement of Rs 180 billion package for the revival of export-oriented industries should be implemented without any further delay along with stability in fuel prices, they appealed.

The traders were concerned over the decline in exports and an increase in trade deficit mainly due to increased cost of doing business, which had adversely affected the export sector.

They said that following an alarming increase in trade deficit of the country during July 2016 to January 2017, Pakistan’s external sector was facing increased pressure, as its trade deficit had widened by 28.7 percent to reach $17.4 billion due to a continuous decline in exports and double-digit growth in imports.