KARACHI: The government faces a potential surge in terms of foreign exchange in fuel costs if it persists with its 100 percent axle load control regime (ALCR) on motorways and highways.

This concern has been highlighted by the All Pakistan Solvent Extractor’s Association (APSEA) to Caretaker Commerce Minister Gohar Ejaz. APSEA underscored the severe economic repercussions that could arise if the axle load control regime remains in effect.

According to the statement, the new axle load regime substantially diminishes the lifting capacity of each truck (by 40 percent on 22-wheelers and 100 percent on 10-wheelers). This reduction is anticipated to lead to a 50–60 percent surge in freight prices.

The implications of this surge in fuel costs are profound, particularly in the context of the edible oil extraction industry. The Chairman of APSEA has expressed deep concern over the potential negative impact on industrial activities, emphasizing the heightened cost of doing business and the inevitable rise in food inflation.

Chairman of APSEA warned that the reduction in truck lifting capacity would result in a substantial increase in freight expenses, representing a significant portion of total import costs. Additionally, it would lead to a twofold increase in the cost of freight for incoming oil seeds and meal, causing a projected rise of Rs 12 to Rs 14 per kilo in edible oil prices and Rs 8 to Rs 10 per kilo in chicken prices.

Given the significant repercussions on both the industry and the broader economy, APSEA appeal to the government to reconsider the 100 percent Axle Load Control Regime. The recent decision to enforce this regime without relaxation, effective from November 15, 2023, poses a serious threat to the economic stability of the Edible Oil Extraction Industry and related sectors.

Copyright Business Recorder, 2023