President of Pakistan Businessmen and Intellectuals Forum (PBIF) Mian Zahid Hussain said on Monday that expected rise in oil prices should be taken seriously because it would damage economy. He said that oil prices remained subdued for three years but now Opec had joined hands after 2008 to increase prices, which was a bad news for all the oil importing countries including Pakistan.
Mian Zahid Hussain said that oil prices had helped Pakistan save $7 billion but it hadn't helped boost exports, investment or substantially reduce trade deficit. "Now Opec has agreed to cut production by 700,000 barrels per day which has resulted in 5 percent hike in international oil prices while second meeting of the cartel is scheduled next month which may trigger massive price hike," he said. In such a scenario, cost of doing business will climb, hitting production and exports, increase inflation and may eat up the forex reserves, he warned. "Increased oil prices will not only hit foreign exchange reserves but also erode our debt repayment capacity at a time the country is exiting the IMF programme therefore policymakers should take notice of the situation and take necessary steps immediately," PBIF president urged.
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