While condemning the jump in rates of petroleum products, the Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel Chairman Mian Anjum Nisar has called for reducing tax ratio on oil products to support the trade and industry, as the government has been charging very high petroleum levy and sales tax on petroleum products. Calling for uninterrupted gas supply to the industrial sector, he urged the government to up-grade gas distribution and supply system to avoid losses.
In a statement issued here on Saturday, Mian Anjum Nisar, observed that with a view to improve the cash flow of businesses at this crucial time, the government will have to facilitate the industry through reduction in tax ratio on all items including the oil products, besides lowering the markup rate, as the country’s economy is going through a challenging phase of post-Covid-19 pandemic. He said that at a time when country’s GDP ratio was very nominal amidst high cost of doing business, the industry needs maximum support and relief.
He said that the economy of Pakistan had severely affected by the Corona Virus disease (COVID-19), as the industries particularly the SMEs are striving to deal with the post-corona economic crunch and need to get support. Instead of providing subsidies or waivers, it is unjust to overburden the industries with hike in cost of production. An increase in petroleum products costs will further weaken the economic environment which is already under threat on various fronts.
FPCCI former chief and BMP Chairman said the price of petrol was increased by Rs2 per litre and that of high-speed diesel by Rs1.44 per litre. The price of kerosene was increased by Rs3.86 per litre and that of LDO by Rs3.72 per litre, respectively.
He 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 also been hiked, which is used in industries.
Anjum Nisar 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. 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 and depreciating the local currency.
BMP Chairman observed that business-friendly policies should be adopted as other neighboring countries of the region are giving to the industry. He said that sizeable cut in oil rates would certainly bring down the cost of doing business and our products would get their due share in the global market.
He called upon the government to address the key issues of the trade and industry, facilitate the economic growth along with improving tax revenue of the government. He said that the impact of COVID-19 has badly affected business and industrial sector, stressing the government to bring down GST in order to ease the difficulties of businesses.
He said that the move would reduce the cost of doing business, attract new investment, promote industrialization and create new jobs. The FPCCI leader said that the government has made unprecedented increase in the ratio of tax, duty and Petroleum Levi ostensibly to earn billion of rupees in revenue.
He called for uninterrupted and low cost gas supply to the industrial sector, urging the government to up-grade transmission and distribution system to ensure continuous and smooth supply of electricity and gas. He urged the government not to tolerate any laxity towards up-gradation of gas and power transmission and distribution system, as any negligence could cause unbearable loss to the trade and industry. He said that the UfG of SNGPL reached around 11.9 percent and 16 percent of SSGC in financial year 2020-21 against the permissible limit of seven percent.
He said that gas and electricity are basic ingredients for the industrial sector and are must to keep the wheel of industry moving. He said that growth of local industry is a barometer of economy.