KARACHI: Business community dismayed by rising oil prices, devaluation of the rupee and unbearable inflation, appreciated Sindh government’s notification for allowing businesses to operate on Sunday
The Chairman of the Businessmen Group (BMG) and the former Chairman of the Karachi Chamber of Commerce and Industry (KCCI) Zubair Motiwala, while expressing their sheer dismay at the exorbitant rise in oil prices of 10.49 rupees per liter, called on the government to subsidize the impact of international oil prices as the increase in oil prices would not only affect overall economic performance but also intensify the hardship for businesses and the common man who were already overburdened due to inflation.
“The government of the day has always wanted the cost of doing business to be reduced, but all these measures are in contrast to this government policy, because the nation today suffers seriously from frequent increases in oil prices, electricity, gas and other utilities. in addition to exchange rate fluctuations and higher tariffs on imports, ”he said.
He said it was of great concern that the winter season has not yet arrived in Karachi, but gas supply to CNG stations has already been suspended for 10 consecutive days.
He said: “We are well aware that international oil prices were higher, but the impact should not be passed on to the public as in the past. Gasoline and diesel prices in Pakistan peaked at Rs87 and Rs65 per liter. During the historically highest international crude price of $ 147.27 per barrel in July 2008 and now when it was around US $ 85, oil prices have increased to 137, 79 Rs per liter, which was beyond our comprehension. “
Referring to the severe devaluation of the Pakistani rupee against the dollar, Zubair Motiwala said that the rupee has devalued by about 12.4% against the US dollar, from Rs 152.30 on May 17, 2021 to around Rs 171.20 on October 16, 2021. Rupee has increased the cost of doing business and promoted inflation; therefore, it is really crucial to review the current strategies pursued by economic managers. “
The government should understand that the share of exports in GDP was 8 percent while the rest of 92 percent was local trade and imports; therefore, devaluation hurts and it has already reached a level where it has become unbearable, ”he added.
He stressed the need to effectively address the emerging situation and manage it very carefully; otherwise, rising oil prices and excessive devaluation will continue to raise the cost of doing business, which would drastically affect industrial performance, increase unemployment and open the floodgates to inflation, making life more difficult, especially for the middle and lower segments of society, in addition to making the poor even poorer.
He further believed that the increase in electricity tariffs was likely due to “take-or-pay agreements” with independent power producers (IPPs), so the policy weight should not be. put on Pakistani consumers.
He also pointed out that the import substitution industries, SMEs, small traders and traders who were the backbone of the economy cannot withstand such shocks. The federal and provincial governments must help them by granting them zero interest loans for their survival; otherwise, they will soon go bankrupt.
He hoped that the federal government would realize the gravity of the situation and, accordingly, take steps to stop a further devaluation of the rupee against the US dollar and also examine the possibility of subsidizing oil prices as has been done in the past.
President KCCI Muhammad Idrees, while appreciating the decision of the Sindh government to lift the restriction on carrying on business on Sunday which has been designated as Safe Day, said that the business community was very happy to see that the Chairman of the Zubair Motiwala businessmen group fulfilled his commitment to small traders / traders within 24 hours by successfully convincing the Sindh government to allow business activities on Sundays.
“KCCI warmly welcomes the Sindh government’s notification that businesses have been allowed to operate on Sunday, which would certainly help minimize grievances from traders who have suffered heavy losses due to the COVID-19 pandemic and closures later, ”he added.
He said that by responding quickly and affirmatively to President BMG’s request, the Chief Minister of Sindh has proven that the government of Sindh is undoubtedly a people-friendly government which despite so many challenges is doing its best. to bring relief to the public, where possible.
Korangi Trade and Industry Association (KATI) chairman Salman Aslam rejected the rise in prices for petroleum products, which have reached the highest level in Pakistan’s history. He called on Prime Minister Imran Khan to reverse the recent rise in the prices of petroleum products. Manufacturers cannot afford record production costs and the worst inflation due to rising oil prices.
Salman Aslam added that the recent increase would affect not only industrialists but also the population.
President KATI said the crisis caused by the corona virus has already affected industrial and commercial activities and the population is already under economic pressure. In such a situation, additional measures should be taken to provide relief.
He added that a comprehensive system should be formed at government level to control production costs and inflation of industries. The government should not try to raise oil prices to meet the goal of the oil development tax.
Salman Aslam said that the increase in oil prices will also increase the prices of electricity and food. He said the recent increase would not only make the means of transport more expensive, but also raise the prices of industrial transport, which would lead to a new inflation storm in the country.
He said the government should make decisions taking into account the capabilities of the people and industry and take action to control the inflation storm.
Copyright Business Recorder, 2021