Massive jump in oil prices to hit trade, industry hard
ISLAMABAD – The business community has rejected huge jump in prices of petroleum products despite the fact that inflation rate is hovering around 12 percent due to more than 68 percent record jump in fuel prices during the last couple of years, warning the authorities that inflation above 6 percent could hurt economic growth.
Pakistan Industrial and Traders Associations Front senior vice chairman Nasir Hameed, in a joint statement with vice chairman Javed Siddiqi, said that oil prices and inflation are closely connected in a cause-and-effect relationship. As fuel rates move up, inflation, which is the measure of general price trends throughout the economy, follows in the same direction upward. On the other hand, if the rates of fuel fall, inflationary pressures start to drop.
Nasir Hameed urged the government to take concrete measures for easing out inflation that has further increased due to rise in oil prices and other essential commodities. He said that inflation is on higher side due to the impact of government’s economic policies of soaring fuel rates, enhancing power and gas tariff, depreciating the local currency and imposing exorbitant duties on imported industry raw material.
Nasir Hameed said that the high speed diesel is used mostly in the transport and agriculture sectors. Therefore, any increase in its price will lead to inflationary impact. Kerosene oil price has also gone up, which is used in remote areas where liquefied petroleum gas is not available for cooking purposes. So, any increase in its price will have an impact on the life of the poor. The price of light diesel oil has been hiked, which is used in industries and its price also goes up.
Javed Siddiqi called for putting the economy on a balanced and sustainable growth trajectory, addressing the underlying structural vulnerabilities, as low export growth, limited foreign exchange reserves, documentation of economy and higher food inflation are still major challenges to the economy.
Referring the data of Pakistan Bureau of Statistics, PIAF chairman said that the country’s overall inflation reached 12.3 percent, which is the highest inflation rate since March 2020. In March 2020, the inflation rate was 10.20 percent but it declined in the subsequent months and had touched 8.59 during June. Once again it has increased to 12.3 percent now.
PIAF vice chairman asked the Ministry of Finance to devise a strategy to control and ease out the impact of inflation. He said that the outcome of stabilization policies, agriculture sector interventions, rigorous monitoring at federal and provincial levels and favourable weather can bring in better results in easing out inflation and sustain the economy towards growth and productivity.
PIAF vice chairman said provincial governments monitoring display of price list and quality of items in open market and effective measures of CCP to control cartelization and undue profiteering can also control the inflation to some extent.