Business leaders have warned that a significant surge in petrol prices would lead to price increases across all commodities and products, adding 5% to the cost of all industrial production.

Speaking to The Express Tribune, they expressed concern that the tough conditionalities imposed by the International Monetary Fund (IMF) would burden the nation, rather than affecting the rulers and bureaucracy who have long enjoyed luxuries.

According to the notification, the price of petrol has increased in the international market over the last fortnight, while the price of high-speed diesel (HSD) has marginally declined. As a result, the government has decided to revise the existing consumer prices of petroleum products to Rs289.41 per litre, marking a rise of Rs9.66 from April 1.

Eminent Industrialist and Economic Analyst Riazuddin said, “Increasing petrol prices initiate a vicious cycle, negatively impacting people from all social strata, particularly industrialists already grappling with numerous challenges due to high gas and electricity tariffs. The cost of all industrial production will rise by 5%, reducing competitiveness. The local industry already struggles to compete with regional counterparts.”

He expressed concerns about economic strategies, noting that both industrialists and industrial workers are facing numerous challenges. With the closure of many Small and Medium-sized Enterprises (SMEs) in all industrial zones of the country, industrial workers are being rendered unemployed. He warned that this hike in petrol prices could raise headline inflation by 2% or 3%, while the government might soon increase diesel prices.

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“Until the government takes severe austerity measures, economic challenges cannot subside in the country,” remarked Hyderabad Chamber of Small Traders and Small Industry (HCSTSI) President Muhammad Farooq Shaikhani. “If some rulers abstain from taking their monthly salaries, it will be of no avail, as they already luxuriate in lavish palaces, vehicles, and an entourage of servants. It is truly shameful that taxpayers traveling on main roads must wait until these official caravans pass by. Mukhtiarkars, sub-registrars, assistant commissioners, police officers, deputy commissioners, divisional commissioners, secretaries, ministers, and other government officers enjoy privileges and special allowances, further burdening the pockets of this inflation-hit nation.”

“Daily wage earners, industrial workers, and other middle-class individuals are resorting to food distribution events organised by Saylani Welfare International Trust, along with other social welfare organisations and philanthropists, due to poverty and economic strains,” he explained. “The crime rate is also escalating daily as poverty fosters criminal activity.”

“Every government formulates and implements its own economic policies, often without providing substantial relief to the people beyond mere rhetoric. If the prices of commodities or products increase, they rarely decrease. Even if the government raises and subsequently reduces the price of petrol, it would be of little benefit. I suggest to the government that while it may impose new taxes and increase prices of imported commodities, it must prioritise providing facilities and security to all traders, businessmen, and industrialists, akin to practices in foreign countries. It appears that Karachiites are currently at the mercy of dacoits and street criminals,” remarked Alliance of Arambagh Markets Association Chairman Asif Gulfam.

Published in The Express Tribune, April 3^rd, 2024.

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