FPCCI slams increase in petroleum prices

ISLAMABAD  - Tanvir A Sheikh, President Federation Pakistan Chambers of Commerce and Industry (FPCCI) has strongly criticized the hike in oil prices in the domestic market.
He stated that this is the time to control over inflation and accelerated oil prices by fiscal adjustment and mechanism. Shift of international price hike is not an economic solution or strategy and this argument in no more valid as our neighboring and competitive countries are not shifting price effect on their domestic market.
Tanvir Ahmed Sheikh mentioned that this is the seventh increase in petroleum prices since February 17 this year. The price of petrol was Rs 53.70 at the end of February. It was raised by 9.3 percent (Rs58.70) on March 1 and by 7 percent (Rs 62.81) on March 16. On April 18, the price of petrol was increased by 4.8 percent (Rs 65.81), by 4.6 percent (Rs 68.81) on May 1 and by 10 percent (Rs 75.69) on June 29.
The prices of diesel, kerosene, petrol, and HOBC have surged by about 73 per cent, 65 per cent, 61.4 per cent and 48 per cent, respectively during this period.
Sheikh has expressed his apprehension that huge accelerated oil prices is badly affecting the cost of energy as well as the cost of production of exportable goods. It will also hamper the competitiveness of the industry in international market, where industry is already facing severe problem on different fronts.
He also said that increase in POL prices is the major cause of inflation, which is already in double figure, on the one hand government is trying to reduce inflation in the country and on the other hand government is continuously raising POL prices sharply.
It is notable that inflation always results in increased poverty by upward shifting of the ‘poverty line’; while increasing cost of production may deteriorate the present level of employment and exports and it will create hindrance to achieve export target. The further trade deficit will be the ultimate consequences of the straight increase in oil prices.