KARACHI, March 1: Federation of Pakistan Chambers of Commerce and Industry President Tanvir A. Sheikh has said the economy is not in a position to absorb the negative impact of sharp increase in petroleum prices, which will also aggravate prevailing political unrest.

The government should have increased the petrol and diesel prices gradually instead of lifting them in one-go giving sharp jerk to the general consumers as well as trade and industry, he said in a statement issued on Saturday.

This increase in petroleum prices would push up inflation further resulting into higher cost of production hampering the competitiveness of exportable goods besides increasing the poverty which may deteriorate the level of employment, he said and added that trade deficit and fiscal imbalances would be the ultimate consequences.

“If shifting of burden of rising international oil prices to the domestic consumers is necessary and even if there is no room for subsidies, the government can compensate the consumers by reducing the taxes levied on petroleum products,” he suggested.

He said the petroleum development surcharge and sales tax were added in the inland cost of oil and the burden of those taxes might be shifted to the levies on other products, which have no effect on common man and industrial competitiveness.

He further said that the Oil and Gas Regulatory Authority (Ogra) should have left this important decision for the incoming government as it is likely to introduce its economic strategies to absorb the impact of surging oil prices.

Korangi Association of Trade and Industry (KATI) Chairman Shaikh Fazle Jalil strongly condemned the increase in POL prices and power rates and said that the government already knew that industrial production and export were not satisfactory and the fresh hike would further enhance the cost of doing business and make exportables uncompetitive on the world markets.

He urged the government to immediately withdraw this increase as it would also fuel inflation making life more miserable for a common man.

F.B. Area Association of Trade and Industry (FBATI) Chairman Idris Gigi said that the business community breathed a sigh of relief after having endured last six to seven months patiently hoping for a better change after the national elections, but the severe shock in the shape of sharp increase in POL and power rates had virtually shattered all their hopes.

He said the fragile economic and political situation before the October 18 carnage, emergency in November and killing of Benazir Bhutto in December last, foreign buyers had refused to visit Pakistan besides suspending placing new orders.

He added after the general elections, foreign buyers had started placing orders, but the increase in power tariff and petroleum prices would prove a severe setback to the exporters as they would have to bear losses to sustain these orders and to remain competitiveness on the world markets.

LAHORE: The Lahore Chamber of Commerce and Industry criticised the government on Saturday for making ‘mass’ increase of Rs5 per litre in petrol and Rs3.5 per litre in diesel prices in one go.

Describing the decision as bad for the economy, president Mohammad Ali Mian and senior vice-president Mian Muzaffar Ali of the LCCI said that oil prices in the international market had, no doubt, reached the record level of $103 per barrel but it would have been better if the government had passed the burden on to the consumers gradually or left it to the new government.

They said that the raise in POL prices was a further blow to the industrial sector already facing a crisis on account of energy shortages and the high cost of doing business. It also seemed an attempt to create trouble for the incoming government, they charged.

FAISALABAD: The textile exporters have termed the latest hike in petroleum prices and electricity tariff as negative and apprehended that the situation would force exporters out of the international market and it would not be possible to achieve the target of $19 billion.