KARACHI: Rejecting the price hike in petroleum prices, business leaders on Friday said the country needs an out-of-the-box solution to stabilise the economy instead of ruthlessly counterproductive decisions aimed at ruining the industries and consumers.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh said the government has no clue about the socioeconomic repercussions of the third massive hike in petroleum prices which is bound to mount inflationary pressures beyond the control of any sector or industry to absorb.

This would result in industrial shutdowns, decline in exports, dwindling domestic demand, social unrest, unemployment and low economic growth, he added.

Despite repeated reminders, the government did not address teething problems in the import of Russian crude like handling of oil cargoes; adjustments required vis-à-vis refining processes and commercial transactional procedures to settle oil payments.

Russian crude could have cost 35-40pc cheaper as compared to global market rates, he deplored.

Mr Irfan recalled that just four weeks ago, the authorities had increased the electricity base tariff by Rs7.50 per unit and the FPCCI made repeated demands that electricity and petroleum prices should be stabilised by curtailing the distribution and line losses and reducing systemic inefficacies.

He feared how exporters could profitably meet the orders-in-hand after the triple blow of electricity tariff increase and petroleum price hikes thrice within a short span of four weeks.

The FPCCI chief said that domestic and international demand for Pakistani products would be at an all-time low as inflation has severely affected the purchasing power of the domestic consumers and for international and regional markets, Pakistani products have become uncompetitive by a large margin.

He claimed that the government has missed all macroeconomic indicators and their targets for FY23 and, for FY24 as well, these continuing bad economic decisions will have a lasting effect on all economic performance indicators — be it exports, industrial production, inflation, employment generation and revenues.

Korangi Association of Trade and Industry (KATI) President Faraz-ur-Rehman asserted that the government’s inability to curb inflation has exposed the people to the harsh conditions imposed by the International Monetary Fund (IMF), as well as the unscrupulous practices of hoarders and profiteers.

He said that the populace is grappling with multiple challenges, including record inflation, surging electricity costs, and soaring exchange rates.

He reiterated his longstanding call for measures to lower electricity tariffs, emphasising that while both the public and the business community have been vocal in their protests, tangible actions to combat inflation remain elusive.

The KATI chief warned that unless immediate steps are taken to lower petroleum prices, the ongoing inflationary spiral could push some individuals to contemplate desperate measures, such as suicide.

He urged the caretaker government to take emergency measures to provide immediate relief to the masses, while the economy is on the brink of destruction.

Published in Dawn, September 2nd, 2023