Trade, industry need low-cost energy for high growth: PIAF
The Pakistan Industrial and Traders Association Front (PIAF) Mian Nauman Kabir has said that industries need low-cost energy to bring down their cost of production, keeping their goods competitive in the international market.
In a joint statement, PIAF senior vice chairman Nasir Hameed and vice-chairman Javed Siddiqi said Pakistan exports cannot compete with China, Bangladesh and India where power tariffs were 7-9 cents, as the country’s exports may witness a major setback in present days due to high cost of electricity, which has become a major stumbling block in industrial development and boosting exports. They said that fuel and electricity are regarded as the lifeline of any economy and play a pivotal role in the socio-economic development of a country.
They observed that the government, in present circumstances, would have to reduce the price of electricity along with the cut in the prices of petroleum products to bring down the cost of doing business and to promote industrial activities.
PIAF senior vice chairman said that business activities were already in decline and in this situation the government should take serious steps to cut the cost of doing business, as the recent hike in oil rates would further enhance the cost of production, making transport more expensive. While rejecting the recent massive increase of energy rates, he urged the government to withdraw the decision to hike in prices of petroleum products, as the move will hit the industry hard.
Nasir Hameed observed that the burden of the surge in oil price in the international market is immediately transferred to the masses by the government but the process of reduction in the prices is always very slow, he noted.
He said that the economy of Pakistan, particularly the SMEs are striving to deal with the post-corona economic crunch and need to get support. Instead of providing subsidies or waivers, it is unjust to overburden the industries with a hike in the cost of production. An increase in petroleum products costs will further weaken the economic environment which is already under threat on various fronts.
Javed Siddiqi said that there is no denying the fact that oil rates have been on the rise in the international market now, but the government instead of passing on this surge to the public can reduce the number of taxes on petroleum products as the fuel is the engine of growth. He said if fuel would be heavily taxed, the entire economy would suffer unprecedentedly. He said that petrol and HSD are two major products that generate most of the revenue for the government because of their massive and yet growing consumption in the country. Average petrol sales are touching 750,000 tons per month against the monthly consumption of around 800,000 tons of HSD.
PIAF Vice Chairman said the economy is already in a precarious situation, this constant back and forth will only increase volatility when we ought to be heading for stability. He said that the cost of doing business and cost of production has shot up to the level of un-competitiveness. The cost of borrowing was huge and capital financing has become more expensive.