Surge in fuel prices can lead to mass unemployment in Pakistan, say business leaders

Islamabad [Pakistan], August 17 (ANI): Several business leaders in Pakistan in response to the recent hike in petroleum prices by the interim government, have issued a warning, saying that the decision can lead to the closure of 50 per cent of industrial units and trigger mass unemployment, according to Dawn. 
They said that the trade and industry are also battling to survive the increase in power tariff by almost Rs 10 per unit and they would not be able to survive the increase in the prices of petrol and diesel by Rs 17.50 and Rs 20 per litre, respectively. 
Moreover, the surge in prices will contribute to the existing inflationary pressures and will hence raise the costs of living and manufacturing, they added. 
Suleman Chawla, Acting president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that the apex chamber repeatedly asked the last coalition government to address problems like handling oil cargoes, adjustments in refining processes and transactional procedures in the import of Russian crude, reported Dawn. 
Mentioning the country's crippling economy, he said that the international oil markets are in flux and stated the demand for petroleum products internationally will remain low for a couple of years as Pakistan has been dealing with a slowdown in the economy. 
Adding to that, refineries' domestic demands will not even cross 150,000 barrels per day for imported crude due to the unprecedented slowdown of the national economy, he added.   
He further asked the government to ensure no further increase in the key policy rate, petroleum prices and electricity tariffs and eliminate any manipulation in the exchange rate to attain economic stability, Dawn reported. 
Mohammed Tariq Yousuf, President of the Karachi Chamber of Commerce and Industry (KCCI) said that the recent hike in fuel prices will further increase the hardships of consumers.
He noted that 50 per cent of industrial units have also closed their operations while the remaining ones are still struggling for their survival. 
“We fear that the rest of 50pc industries will also shut down due to the exorbitant energy tariffs,” he said and urged the Pakistan government to reduce the petroleum and electricity prices to lower production costs.  
Moreover, Korangi Association of Trade and Industry (KATI) President Faraz-ur-Rahman said that the rise in prices will cause an increase in unemployment and hurt the underprivileged segments of society, according to Dawn. 
He further asked the government to prioritise the implementation of renewable energy initiatives. 
To which, Pakistan Business Council (PBC) responded and said that it is unrealistic to expect a temporary government to address such issues. 
Ehsan Malik, Chief Executive Officer of PBC said that it is unrealistic to expect a temporary government to address the immediate challenges of inflation, devaluation, letters-of-credit opening, utility tariffs etc. These challenges are a result of fundamental flaws that have existed for years in our economy. 
Pakistan has been relying on handouts and debt to fund imports, high government expenditure, mounting losses of state-owned enterprises and distribution losses in the energy sector, he added. 
Furthermore, the Site Association of Industry President Riazuddin added that the caretaker government's mandate does not permit him to take the reform route or carry out structural changes during its short tenure.
Ehsan further said the country has been living beyond its means while relying on handouts and debt to fund imports, high government expenditure, mounting losses of state-owned enterprises and distribution losses in the energy sector.
Earlier this month, following the increase in fuel prices, local transport companies unilaterally increased fares by up to 20 per cent without consulting the authorities, reported ARY News.
This came after the federal government raised the price of petrol by (PKR)19.95 per litre for the next weekly review earlier in the day.
“Petrol price has been increased by (PKR)19.95 per litre to (PKR)272.95, while high-speed diesel is being increased by (PKR)19.90 to (PKR)273.40,” announced Finance Minister Ishaq Dar, ARY News reported. 
The revised prices took effect immediately, he added, adding that a rise in fuel costs was unavoidable due to IMF pledges to impose a petroleum development levy (PDL) on rates. (ANI)