Pakistan Businessmen and Intellectuals Forum (PBIF) President and former provincial minister Mian Zahid Hussain on Monday said expected rise in oil prices should be taken seriously as it would damage the economy.
“Oil prices remained subdued for three years but now OPEC has joined hands after 2008 to increase prices, which is a bad news for all the oil importing countries including Pakistan,” he said in a statement.
Hussain said that oil prices had helped Pakistan to save seven billion dollars, but it had not helped the country to boost exports, investment or substantially reduce trade deficit.
He said now OPEC had agreed to cut production by seven hundred thousand barrels per day which had resulted in five per cent hike in international oil prices, while second meeting of the cartel was scheduled next month which may trigger massive price hike.
“In such a scenario, cost of doing business will climb, hitting production and exports, increase inflation and may eat up the foreign exchange reserves,” he warned. Hussain said that increased oil prices would not only hit foreign exchange reserves but also erode the country’s debt repayment capacity at a time the country was exiting the IMF programme; therefore, policymakers should take notice of the situation and take necessary steps immediately.
