KARACHI – Abdul Rehman Fudda, president of the S.I.T.E. Association of Industry (SAI), on Saturday expressed concern over the extraordinary increase in petroleum oil and lubricant (POL) prices by up to Rs55 per litre and urged the government to reduce taxes on petroleum products to ease the burden on consumers and industry.
In a statement, he said that amid ongoing tensions between the United States and Iran and the resulting surge in international oil prices, the government should absorb the impact by cutting petroleum taxes rather than passing the entire burden on to consumers.
Mr Fudda warned that failure to provide tax relief on POL products would further fuel inflation and intensify economic pressure on industries and the public.
He said the price hike would have multiple negative impacts on the economy and could prove detrimental for industrial activity, particularly at a time when the country cannot afford another spike in inflation.
According to him, higher fuel prices would significantly increase transportation costs and raise the cost of industrial inputs, making the procurement of raw materials more expensive. This, he added, would ultimately affect the competitiveness of several industries, especially export-oriented sectors.
Mr Fudda said the higher cost of essential goods would also raise the overall cost of living, affecting all segments of society, particularly those living on or below the poverty line.
He pointed out that the price hike had been implemented despite the fact that existing fuel stocks had been purchased at relatively lower prices.
The SAI president suggested that, along with other measures to reduce POL consumption, the fuel quota of members of the national and provincial assemblies as well as government officers should be curtailed by at least 50 per cent.
He added that consumers of petrol and diesel were already paying around Rs121 and Rs118 per litre, respectively, in taxes and margins.
Mr Fudda urged the government to reduce petroleum taxes in order to absorb the impact of rising international prices instead of passing the entire burden on to consumers.
