Syed Mazhar Ali Nasir, Sr. Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the caretaker Prime Minister Nasirul Mulk to look into price hike of 8.9% in P.O.L products.
He elaborated that the government, through POL price hike would generate Rs. 20 in the form of tax on sales of one liter of petrol, similarly Rs. 30 is collected on the sale of one liter of diesel. He, therefore, proposed that the government to evolve some proper mechanism and concrete economic policies to increase the revenues and stabilize the economy on sound footings instead of taking frequently, the short-term decisions on ad-hoc basis by increasing the prices blindly. They added that the government instead of using POL prices as a tool to generate revenue should curtail its unnecessary expenses and taking austerity measures and enhance the tax net.
Sr. Vice President of FPCCI argued that the increase in POL prices would have multiplier effect on trade and industry and economic activities which are already confronted with many challenges. The exorbitant increase would further spur cost-push inflation; increase the cost of transportation of raw material and consumer goods; inflate cost of production etc which will be unaffordable in the present circumstance when or exports is towards decline.
He added that the high price of fuel in the country would further increase the incentive and encourage its smuggling as around 15%-20% petrol consumed in Pakistan is smuggled from neighboring countries thus causing not only loss to the government exchequer but also to the motorist using adulterated fuel.