Petroleum Prices Government has Failed to Read the Writing on the Wall Irfan Iqbal Sheikh

Karachi (PR): Mr. Irfan Iqbal Sheikh, President FPCCI, has unequivocally stated that the government has no clue that what will be the socioeconomic repercussions of the third massive hike in petroleum prices as FPCCI can see the inflationary pressures to mount beyond the control of any sector or industry to absorb. Industrial shut downs; decline in exports; dwindling domestic demand; social unrest; unemployment and non-existent economic growth will follow, he added.

Mr. Irfan Iqbal Sheikh maintained that the most glaring and worrisome aspect of the last few hikes is that the petroleum levy on petrol has now increased to PKR. 60 / litre. This is bad economics in these times of stagflation and recessionary tendencies in the economy – as we need out-of-the-box solutions to stabilize the economy instead of ruthlessly counterproductive decisions, he added.

It is pertinent to note that late night yesterday, the federal government unveiled yet another and third in a row massive hike in the petrol prices by PKR. 14.91 / litre and HSD by PKR. 18.44 / litre for first fortnight of September 2023 to make petrol PKR. 305.36 / litre from Rs 290.45 / litre and HSD is now PKR. 311.84 from Rs 293.40 / litre.

Mr. Irfan Iqbal Sheikh explained that the apex body forewarned the authorities a number of times over the last few months that they need to address the teething problems in the import of the Russian crude, i.e. handling of oil cargoes; adjustments required vis-à-vis refining processes and commercial transactional procedures to settle oil payments. Nevertheless, the authorities failed to listen to us; else, we would have more Russian crude by now, which is cheaper by a whopping 35 – 40 percent as compared to international markets today, he added.

FPCCI Chief reminded that just four week ago, the authorities have announced PKR. 7.50 per kWh raise in electricity prices; and, just about the same raise two weeks back in petroleum products, i.e. 6 – 7 percent, despite FPCCI’s repeated demands that electricity and petroleum prices should be stabilized by curtailing the distribution & line losses and reducing systemic inefficacies.

Mr. Irfan Iqbal Sheikh also questioned that how the export orders-in-hand can be met in a profitable manner after the triple blow of electricity tariff increase and petroleum price hikes thrice within a short-span of 4 weeks – resulting in uncertainty & price instability.

Mr. Sheikh has expressed his profound concerns that domestic and international demand for Pakistani products will be at an all-time low as inflation has severely affected the purchasing power of the domestic consumers and, for international & regional markets, Pakistani products have become uncompetitive by a large margin.

Mr. Irfan Iqbal Sheikh recalled that the government has missed all macroeconomic indicators & their targets for FY23 and, for FY24 as well, these continuing bad economic decisions will have a lasting effect on all economic performance indicators – be it exports, industrial production, inflation, employment generation and revenues.