The textile exporters have rejected the recent hike in power and petroleum product prices as it will trigger inflationary impact and will ultimately affect the overall trade and business environment.
In a statement here on Saturday, Asghar Ali, Chairman, and Muhammad Asif, Vice Chairman of Pakistan Textile Exporters Association (PTEA) said that businesses were already facing tough challenges and further increase in petroleum prices and power tariff would create enormous inflation and great pressure on business activities. Power tariffs in Pakistan were already one of the highest in the region due to which Pakistani products were losing competitiveness in export markets, they said. In China, India, Bangladesh and other countries, electricity was available to industrial sector at lower rates than commercial users while in Pakistan, power rates for industries were far higher than commercial consumers. The decision to increase oil and power prices, particularly at a time when the economy was struggling for revival, was not in the favour of business growth. They said increasing power and petroleum prices would unleash a new wave of inflation and raise cost of doing business in the country. Instead of increasing petroleum prices, government should decrease petroleum levy to save economy from harmful consequences of high petroleum prices.
Asghar Ali was of the view that the entire industrial sector was already facing multiple internal and external challenges and the recent increase would further aggravate the economic situation. He said that the share of furnace oil in Pakistan’s energy mix is around 50 percent and hike in petroleum products would significantly push up production cost making our exportable products uncompetitive in international market. Government should make all-out efforts to accelerate oil exploration in potential areas of the country for achieving self-reliance as currently the country is producing just 15 percent of the total oil consumption and a huge amount is spent on oil import due to which our import bill has already surpassed US$ 15 billion.
Muhammad Asif said that due to high cost of doing business, ratio of sick industries is on the rise and further increase in power tariff will drastically hit the industrial chain. He said that as result of current increase, especially exporters would suffer a great loss because of continuous fluctuation in tariffs. Instead of frequently increasing energy tariffs, government should develop strategies to control transmission, distribution and theft losses due to which the country is losing more than 30 percent of electricity. Government should focus on exploiting cheap and alternative energy resources for providing uninterrupted power supply to industry at affordable cost so that industrialists could improve productivity and promote exports, he said.
‘Hike in POL prices ‘depressing industrialists’
The government needs to review the increase in petroleum products prices on priority basis and relief should be given to industry and people, said Mian Zahid Aslam, President Faisalabad Chamber of Commerce & Industry (FCCI) on Saturday. He said the industry was already suffering due to high manufacturing cost and the current increase in POL prices would add to the cost of production and it would become very difficult for the products to compete in the foreign markets. He said the surge in domestic oil prices would of course have negative consequences for the economy and the lives of ordinary people. He said the rise in prices had overall impact in direct proportion to the increase on all other sectors and products cost, ranging from transportation to industrial products including daily necessities as well as services. He said this would also leave painful impact on the ordinary persons who were suffering a lot due to cost-push inflation in the country. He said that the country’s economy was turning to its revival pace after a long stagnation. He said with the increase in cost of production, industrial activities could slow down and depress growth prospects of economy adding to the incidence of unemployment and raising the poverty level in the country which was already high. He said consistency in the inputs and utility cost should was a key requirement in making long-term business and industrial expansion plans. Such frequent and high increase in POL products might shatter the confidence and leave negative impression and impact on the local and foreign investors which are dire need of the country for economic stabilization. He said that there are international practices for fiscal space in the Budgets to absorb the increase in international prices of oil to offset or lower the impact. He said that energy crisis, deteriorating law and situation and high input cost along with current devaluation of Pak Rupee have already hurt badly the industrialization and economy growth in the country. Any slight increase in the POL product would multiply the cost of doing business, affecting the productivity of economy and competitiveness of exports and depriving the country of the precious foreign exchange earnings. He urged the government to immediately withdraw the hike in POL prices to save the industry and people from further depression.
