LAHORE: The country’s apex trade body on Saturday, opposing the jump in prices of petroleum products by a significant margin for the rest of Dec 2020, said that the move would sabotage the Prime Minister’s vision of lowering input cost.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Anjum Nisar while talking to a trade delegation here at his office said that the regular attempt of economic managers to increase oil prices along with hike in power and gas tariffs will ultimately harm the government’s overall move of reducing production cost in the country announced by the PM in various phases, including industrial power tariff for SMEs and reduction in mark-up rate to 7 percent by the SBP.
“It is the fact that Brent price in the international market has crossed $50 per barrel but the government can compensate the industrial and general consumers by slashing the levies and taxes ratio on oil, as the government has yet been charging very high petroleum levy and the GST on petroleum products,” he argued.
The FPCCI President said that at a time when country’s GDP ratio was further stretched owing to nominal exports growth mainly due to high cost of doing business, the businesses need maximum relief. He said Pakistan’s economy is going through a challenging time due to the second outbreak of Covid-19 pandemic. With a view to improve the cash flow of businesses at this crisis like situation, the authorities would have to support the economy through decline in taxes ratio on all items including the POL products.
Comparing the current world oil prices with the local rates when present government came to power in Aug 2018, he said that Brent oil price in the international market was $72 per barrel and now it is around $50 a barrel, showing a cut of around 22 dollars. In August 2018, the local market price of diesel was Rs112 per litre, petrol Rs95 and kerosene Rs83 per litre. Now, when the Brent price is $50 per barrel, petrol is over Rs103 per litre and diesel almost Rs108 per litre, which clearly indicates that the benefit of oil prices’ reduction were never passed on to the consumers over the whole period. “It is appreciable that in revising the prices of petroleum products, the government did not pass on the full impact of increase in international prices yet the move would affect the present declining trend in the rate of inflation.”
Copyright Business Recorder, 2020