ISLAMABAD: Minister for Industries and Production, Hammad Azhar has reportedly defended the "premium" on locally assembled cars, arguing that abrupt increase in demand has led to resurfacing of premium phenomenon, well-informed sources told Business Recorder.

The Minister's comments came at a recent Federal Cabinet meeting when the decisions of the Economic Coordination Committee (ECC) were tabled for ratification.

Official documents seen by this correspondent reveal that the Cabinet members drew attention to the premium being charged on locally manufactured cars.

Cabinet members argued that the policy to import cars must be reviewed as protection had allowed the manufacturers to exploit consumers.

Minister for Industries & Production explained that the car industry faced a difficult few months due to Cavid-19 situation and the pent up demand had resulted in resurfacing of the premium phenomenon.

"The situation would normalize as most of the manufacturers are ramping up production," he added.

The Cabinet members suggested that Minister for Industries & Production should carry out an analysis and come up with recommendations to effectively address the issue of premium, which, they added, was unacceptable.

A sub-committee of the National Assembly Standing Committee has also sought details of the agreements between the local assemblers and their principals. Competition Commission of Pakistan is also investigating the reasons for the resurfacing of premium on locally assembled cars.

During a discussion in the cabinet, some of the members raised concern over the revision in policy of duty-free import of cars for the disabled. It was opined that extending the period of importing one car in 5 years to 10 years would go against the physically handicapped. It was claimed that the policy was being massively abused and the one car per 10 years was quite reasonable.

Copyright Business Recorder, 2020