In a resounding chorus of dissent, leaders of the business community have vehemently opposed the recent surge in petroleum prices, demanding innovative and pragmatic solutions to steer the nation’s economy toward stability. These industry stalwarts assert that relentless and counterproductive price hikes will only serve to jeopardize both the industrial sector and the livelihoods of ordinary citizens. Irfan Iqbal Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has criticized the government’s apparent lack of understanding regarding the far-reaching consequences of this third significant petroleum price increase. According to Sheikh, the ensuing inflationary pressures could spiral beyond the capacity of any sector or industry to absorb, potentially leading to industrial shutdowns, dwindling exports, reduced domestic demand, social unrest, unemployment, and a sluggish economic growth rate.
Despite persistent calls for action, the government has yet to address various issues related to the importation of Russian crude oil, such as the handling of oil cargoes, necessary refinements to existing processes, and procedural enhancements to facilitate oil payments. Irfan Iqbal Sheikh further laments that Russian crude could have been procured at a cost 35-40% lower than prevailing global market rates, underscoring missed opportunities for cost savings.
In a startling reminder, Sheikh recalls that merely four weeks ago, the authorities approved a substantial increase of Rs7.50 per unit in the electricity base tariff. The FPCCI had consistently urged the government to stabilize both electricity and petroleum prices by addressing issues like distribution and line losses and reducing systemic inefficiencies. This consecutive surge in electricity and petroleum prices within a short span of four weeks raises severe concerns about how exporters can viably fulfill existing orders.
In the wake of these price hikes, domestic and international demand for Pakistani products is anticipated to hit unprecedented lows. Inflation has eroded the purchasing power of domestic consumers, rendering Pakistani products significantly less competitive in global and regional markets. The government’s inability to align with macroeconomic indicators and targets for FY23, coupled with the persistently poor economic decisions, is expected to cast a long shadow over various performance indicators, including exports, industrial production, inflation rates, employment generation, and revenue collection.
Faraz-ur-Rehman, President of the Korangi Association of Trade and Industry (KATI), echoes these concerns, emphasizing that the government’s failure to rein in inflation has left the populace vulnerable to the harsh realities imposed by the International Monetary Fund (IMF) and the unscrupulous practices of hoarders and profiteers. The challenges facing the people are multifaceted, including record-high inflation, surging electricity costs, and fluctuating exchange rates.
Rehman underscores the urgent need for measures to reduce electricity tariffs, urging that both the public and the business community be vocal in their protests against rising costs, yet tangible actions to combat inflation have remained elusive. He sounds a dire warning, suggesting that if immediate steps are not taken to mitigate petroleum price increases, the ongoing spiral of inflation could drive some individuals to contemplate desperate measures, including suicide.
In a fervent plea to the caretaker government, Rehman implores them to take emergency actions to alleviate the burdens faced by the masses, emphasizing that the nation’s economy teeters on the brink of destruction. As these critical issues unfold, it becomes increasingly imperative for the government to engage in dialogue with the business community and stakeholders to devise effective and sustainable solutions.