KARACHI: Irfan Iqbal Sheikh, President FPCCI, has demanded that the federal government should announce a reduction of 18–20 rupees per litre in the prices of petroleum products as international oil prices are showing a declining trend despite the harrowing ongoing conflict and supply cuts announced by Saudi Arabia and Russia till December 2023. I can project that these major producers of oil will continue their cuts beyond December 2023, he added.
He added that international oil prices are now down to $81.30 per barrel and that is below 50-day moving average of $85.70. This indicates that global oil demand outlook is bearish; and, as per latest statistics, demand from both US & China is down and US reserves are up as well by 11.9 million barrels.
Irfan Iqbal Sheikh explained that this phenomenon categorically establishes the fact that the global economy is on a downslide cumulatively and wars between Russia & Ukraine and Israel – Palestine are the principle factors in the development of this bleak economic scenario for the world.
FPCCI Chief maintained that, in the immediate term, petroleum prices are the only safe bet for the government to tame inflationary pressures in light of the ongoing IMF-SBA review as IMF will now allow the most logical downward revision of key policy rate of the SBP.
FPCCI firmly believes that policy rate can be reduced safely from 22 percent to 20 percent in view of the core inflation at 18.50 percent recorded for the month of November 2023. Prices of food and petroleum have nothing to do with the policy rate and it should be based on core inflation, Sheikh added.
Irfan Iqbal Sheikh proposed that an essential commodities price-oversight mechanism should be put in place in consultation and participation of private-sector to better manage the prices of key commodities which are showing a persistent downward trend globally. We should be efficient, objective and conscientious in tackling inflation; and, its devastating impact on the socio-economic fabric of the country.
Muhammad Suleman Chawla, SVP FPCCI, apprised that exporters badly need a breather in the cost of production index as Pakistan’s competitiveness has taken a hit grossly due to the multiple and at times simultaneous rounds of major increases in electricity, gas and petroleum prices over the last one year. This is the high time the government can offer a respite to the business community without compromising the fiscal targets, he added.
Copyright Business Recorder, 2023
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