KARACHI: The business community has condemned the increase in fuel prices, as this would increase cost of doing business and add to the miseries of the masses.
The Economic Coordination Committee (ECC) chaired by Dr Abdul Hafiz Sheikh approved Rs9/liter increase in the price of petrol. [the_ad id=”31605″]President Karachi Chamber of Commerce and Industry (KCCI) Junaid Ismail Makda condemned the price increase saying this would further increase the cost of doing business.
“They increase fuel prices as international price of oil are higher but the relief is not passed on when the global price decline. This is not a good policy and people cannot sacrifice anymore. Such measures will lead to public agitation.”
He said currency devaluation and successive rounds of fuel price increase was quite contrary to the government’s narrative of improving ease of doing business.
Chief Commercial Officer at JS Global Capital Khurram Schehzad said this would increase the transportation costs impacting the margins of businesses. “It would negatively impact the market even for exploration and oil marketing companies, as such exorbitant increase would also impact oil products’ consumption.”
Schehzad said rising cost of doing business would limit business expansion and could result in further lay-offs across the industry.
Advisor to President FPCCI Mazhar Ali Nasir said the immediate impact would be on transportation costs and if prices of other fuels are also increased, there would be a serious dent on the government’s narrative of export enhancement and import substitution.
“International Monetary Fund (IMF) has advised 25 percent increase in electricity prices net of line losses, which would actually be approximately 40 percent increase. Businesses are not cost effective anymore and if such measures are implemented, there would be no investment in the industrial sector.”
Nasir said the investor sentiment was already shaken due to the inconsistency of polices. “There has been no investment in the industry and if locals are reluctant, how can we expect foreigners to come and invest.”
Chairman Pakistan Apparel Forum Zubair Motoiwala said this would increase cost of doing business leaving Pakistan’s exporters uncompetitive in the international market. “I do not understand whatever the government is planning to do. They talk about ease of doing business and then there is currency devaluation and fuel price hike,” Motiwala said.
He said this was the result of 35 percent currency devaluation while international oil prices were also increasing adding that such an exorbitant price hike would result in serious inflationary pressures for business and masses alike.
CEO of Arif Habib Commodities Ahsan Mehanti said this was not good news for the market overall as the inflation numbers would be revised and there could be further increase in the policy rates.