The industrialists/traders have strongly criticized government's decision to increase price of petroleum products saying that repeated hike in the prices of oil and gas in recent past has badly eroded Pakistan's competitiveness due to which the country is losing exports and attraction for investment while this situation would further destabilize the economy.
Secretary General (Federal) Businessmen Panel (BMP), Ahmad Jawad, has strongly opposed the increase in prices of petroleum products consecutively second time in the year of 2018. He said that repeated increase in the prices of oil badly eroded Pakistan's competitiveness.
He said the soaring prices would also affect the country's agriculture sector because hike in petroleum prices would increase the input cost of agriculture production as High Speed Diesel (HSD) was being used in tractors, tube-wells, harvesters, and other agricultural machinery.
Terming it anti-people and anti-economy move he asked OGRA to subsidize the prices of diesel at least, so that masses and agriculture sector could not suffer more. "Few years back, the Oil Companies Advisory Committee had subsidized the prices of diesel in the country so why not now," he questioned.
Jawad had remained chairman of FPCCI Standing Committee, said that in India, average diesel price is Rs 64 and in Bangladesh HSD price is Rs 65 per liter; similarly, in Afghanistan, the diesel rate is AF 48 per liter and if we compare with Pakistan the HSD price is 95.83 per liter which is too much.
He said government cannot hide behind the currency rate factor in the wake of HSD prices contrary to the neighbouring countries and if our currency is weakened day by day then it is the responsibility of the finance division, it is not due to people of Pakistan.
He said country's export is already declining due to the high cost of business. He said increase in fuel prices will sharply increase the cost of doing business; even the prices of vegetables and fruits are about to rise and the transporters will demand fare increase from the wholesalers and vendors for transportation of greens from upcountry on account of diesel price hike.
The Businessmen Panel's official said that government is still collecting heavy taxes on the sale of petroleum products. He said it receives around Rs 25 billion in general sales tax on petroleum products and Rs 10 billion in the shape of petroleum levy from the consumers every month.
"Consumers in Pakistan have been paying up to 38% more on oil purchase compared with prices prevailing in the international market in order to make up for the shortfall in government revenues," he said.
According to a report submitted by Ogra to the Economic Co-ordination Committee (ECC) of the cabinet, financial year 2015-16 was the worst for Pakistan's oil consumers during which they paid the highest rate of sales tax on the HSD purchase.
During 2015-16, consumers paid up to Rs 29.57 per litre in sales tax and Rs 6 per litre as petroleum levy on the HSD; Following some recovery in crude oil in 2016-17, the tax rate was slashed to Rs 19.39 per litre on the HSD by the ECC which is still high.
The BMP demanded the Prime Minister Shahid Khaqan Abbasi to immediately withdraw the increased rates of POL prices as the current economic conditions don't allow such measures.
President of Lasbela Chamber of Commerce and Industry (LCCI) Yakoob Karim rejected the massive increase in POL prices terming it a cruel act by the present government.
He said that over 11 percent raise in petroleum prices would result in a big increase in all industrial inputs, making country's exports costlier, further losing precious export markets due to inability of the exporters to compete the neighbours in international markets.
Yakoob said the move will reduce the competitiveness of Pakistani goods in the international market and put the government's initiatives in reverse for boosting exports.
"POL price increase will also add to the complexities of the agriculture sector which is already in a bad state-of-affairs because of water scarcity and high input cost," he said.
He demanded of the government to withdraw recently made exorbitant hike in POL prices to avert huge economic losses and to win the trust of trade, industry and masses; otherwise anti-government sentiments would rise. He said that oil prices in the international market are not rising at the ratio of what the government is increasing at home.