October 17, 2021: Chairman Businessmen Group (BMG) & Former President Karachi Chamber of Commerce & Industry (KCCI) Zubair Motiwala, while expressing sheer dismay over exorbitant hike in petroleum prices by Rs10.49 per liter appealed to the Government to subsidize the impact of international oil prices.
The increase in petroleum prices would not only affect the overall economic performance but would also intensify the hardships for businesses and the masses who were already overburdened because of inflation and their budgeting would be further disturbed due to a hike in petroleum prices and also the electricity tariff.
“The current government has always desired that the cost of doing business is reduced but all these steps are in contrast to the policy of the government as the nation nowadays suffers badly due to frequent hikes in petroleum prices, electricity & gas tariffs, and other utilities in addition to fluctuating exchange rates and higher duties on imports”, Chairman BMG added in a statement issued here on Saturday.
He further pointed out that it was a matter of grave concern that the winter season has not yet arrived in Karachi but gas supply to CNG stations has been suspended for 10 consecutive days which was really worrisome.
He said, “We are well aware that the international oil prices were on the higher side but the impact must not be passed on to the public as done in the past. The petrol and diesel prices in Pakistan peaked at Rs87 and Rs65 per liter during the historically highest ever international crude price of $147.27 per barrel in July 2008 and now when it was around US$85, the petroleum prices have been raised to a whopping Rs137.79 per liter which was beyond our understanding.”
Referring to a severe devaluation of the Pakistani rupee against the dollar, Zubair Motiwala said that the rupee was seen devaluating by approximately 12.4 percent against US Dollar from Rs152.30 on May 17, 2021, to around Rs171.20 as of October 16, 2021. “Severe devaluation of rupee has raised the cost of doing business and fostered the inflation, therefore, it is really crucial to review the current strategies being pursued by the economic managers.”
“The government needs to understand that the share of exports in GDP stood at 8 percent while the rest of 92 percent was local trade and imports hence the devaluation is hurting and has reached to a level where it has become unbearable”, he added.
He stressed that the emerging situation has to be efficiently addressed and handled very carefully otherwise, the rising petroleum prices and excessive devaluation will continue to increase the cost of doing business, which would terribly affect the industrial performance, raise unemployment and open the floodgates of inflation, particularly for the middle and lower segments of the society, besides making the poor poorer due to unbearable inflation. “The inflation monster needs to be effectively controlled.”
He further opined that the increase in electricity tariff was probably due to ‘Take or Pay Agreements’ with the Independent Power Producers (IPPs) so the brunt of the policy should not be put on the people of Pakistan.
He also underscored that the import substitution industries, SMEs, Small Traders, and Shopkeepers who were the backbone of the economy cannot bear such shocks. The federal and provincial governments must help them out by providing loans at zero percent interest rate for their survival otherwise they will become bankrupt.
He hoped that the Federal Government would realize the gravity of the situation and accordingly take steps to stop the further devaluation of rupee against dollar and also look into the possibility of subsidizing petroleum prices as done in the past.
Meanwhile, President KCCI Muhammad Idrees, while appreciating the Sindh Government’s decision to lift the restriction imposed on carrying out businesses on Sunday which was earmarked as Safe Day, stated that the business community was very happy to see that Chairman Businessmen Group Zubair Motiwala fulfilled his commitment to small traders/ shopkeepers within 24 hours by successfully convincing the Sindh government to allow business activities on Sunday.
“KCCI warmly welcomes Sindh Government’s notification in which businesses have been allowed to operate on Sunday which would certainly help in minimizing the grievances being suffered by shopkeepers who underwent severe losses due to COVID-19 pandemic and subsequent lockdowns”, he added.
He said that by promptly and affirmatively responding to Chairman BMG’s request, Chief Minister Sindh has proved that the Sindh government was undoubtedly a peoples’ friendly government which despite so many challenges, tries its best to somehow provide relief to the public whenever possible.