Businessmen laud cut in petroleum prices, call for power tariff reduction

KARACHI/LAHORE-The Karachi Chamber of Commerce Industry (KCCI), while appreciating substantial reduction in the petroleum products’ prices on Monday, termed it the right decision in the wake of decline in their prices in the international market and appreciation of the rupee.
“The decision taken by the caretaker government will provide relief to common man and the business community in the ongoing phase of inflation, besides having a positive impact on the economy,” Chairman Businessmen Group (BMG) Zubair Motiwala and KCCI President Iftikhar Ahmed Sheikh said in a joint statement.
They said it was the second consecutive cut in petroleum prices which would certainly help in bringing down the inflation to some extent. They urged that an effective price control mechanism and strict implementation of government rates of various household products must be ensured with a view to provide relief to the inflation-stricken poor masses.
Zubair Motiwala lauded the government’s decision of passing on the benefits of reduced oil prices in the international market to the people of Pakistan and expressed the hope that the caretaker prime minister would also take measures to reduce the power tariffs and devise effective strategies for dealing with the ongoing gas loadshedding and low gas pressure. Highlighting the issue of gas supply and pressure in all seven industrial town zones of Karachi, Motiwala also stressed on need of urgent steps to ensure ‘wheels of industries keep on spinning’ for smoothly carrying out production activities and meeting export targets.
He pointed out that Karachi Electric’s sales to industries had dropped by 9.5 percent in the last three months since electricity tariff started increasing. He suggested to opt other possibilities like reducing thefts, pilferages and technical line losses etc. along with review of agreements with Independent Power Producers (IPPs) for reducing power tariff as well as burden on power consumers.
Expressing concerns over increase in gas price for local industries, the BMG chairman underscored the need of practical and pragmatic steps to ensure smooth functioning of local industries as the recent drop in energy consumption clearly indicates that industries are not functioning and closing down.
KCCI President Iftikhar Ahmed Sheikh said that the reduction in petroleum prices would reduce the cost of production which would ultimately extend a direct benefit to the people. “The industrial sector would definitely benefit from the reduction in POL prices mainly as fuel and electricity are regarded as the lifeline of any economy and play a pivotal role in the socio-economic development of a country,” he argued. The KCCI president stated that tariffs of inter-city transportation must also be brought down which were immediately raised whenever POL prices go up but meagerly reduced when the prices go down. “We need self-assessment as to how prices can be reduced after cut in oil prices,” he added.
He appealed to the government to link the transporters tariffs with the prices of prevalent price of petroleum products by devising a formula whereby the benefits of reduced oil prices trickle down to common masses and the industries. Meanwhile, the Lahore Chamber of Commerce & Industry has lauded government’s decision to reduce petroleum product prices. The LCCI office-bearers anticipate a substantial decrease in interest rates and electricity costs in the near future. LCCI President Kashif Anwar, Senior Vice President Zafar Mahmood Chaudhry, and Vice President Adnan Khalid Butt commend the considerable reduction in fuel prices, emphasizing its positive impact on trade, industry, and the general population. They also urge similar relief for essential commodities like flour, edible oil, rice, pulses, and spices.
The LCCI office-bearers acknowledge the government’s commitment to stabilizing the economy, evidenced by the massive cut in petroleum prices and a significant Rs. 28 drop in the interbank dollar rate within the past 1.5 months. The interbank dollar rate, which was Rs. 305 on September 1, 2023, has fallen to Rs. 277 on October 13, 2023, they noted. The LCCI office-bearers also attribute this economic progress to Chief of Army Staff General Syed Asim Munir and the caretaker government, who have actively supported and revitalized the economy. Furthermore, they anticipate that reduced fuel prices will lead to lower operating costs for businesses, thereby enabling Pakistani products to compete more effectively in the international market.
The LCCI office-bearers emphasize that this decision not only relieves the industrial sector but also paves the way for growth in the agriculture sector. They highlight the significance of the agriculture sector as an engine of economic growth, with lower fuel prices reducing the input costs for agricultural production, which relies on high-speed diesel for tractors, tube-wells, harvesters, and other machinery. In addition to the reduction in petroleum prices, they call on the government to lower electricity prices, particularly as a substantial amount of electricity is generated through thermal means. This dual relief in fuel and electricity costs promises a positive shift in the business landscape at a time when the industry is grappling with high operational expenses.