KARACHI: A sharp surge in fuel prices has sparked serious concern across Pakistan’s business community, with industry leaders warning of rising production costs, declining export competitiveness, and potential economic disruption.
Amid escalating global oil prices linked to tensions in the Middle East, representatives of the Federation of Pakistan Chambers of Commerce and Industry have urged the government to declare an economic emergency and temporarily suspend the Petroleum Development Levy (PDL) to provide immediate relief to businesses and consumers.
FPCCI President Atif Ikram Sheikh cautioned that the textile and manufacturing sectors are likely to face a steep rise in freight and transportation costs, significantly increasing production expenses. He warned that passing such abrupt fuel price hikes directly onto industry and consumers is unsustainable and could result in factory shutdowns and reduced operations.
Senior Vice President Saquib Fayyaz Magoon echoed these concerns, highlighting the severe impact on agriculture. With harvesting season underway, soaring diesel prices could render the use of tractors, tube wells, and harvesters financially unviable, posing risks to food security.
He further noted that small and medium enterprises (SMEs) — considered the backbone of the economy — would be disproportionately affected due to limited financial resilience, potentially leading to liquidity crises and operational slowdowns.
FPCCI Vice President Asif Sakhi pointed out that while regional competitors such as India, Bangladesh, China, and Vietnam have increased fuel prices by only 2–10%, Pakistan has seen a cumulative rise of 77%, putting local industries at a competitive disadvantage.
He also advocated for alternative energy solutions, particularly ethanol derived from the domestic sugar industry, urging the government to develop a supportive policy framework. Additionally, he called for an increase in minimum wages to help offset the inflationary burden on citizens.
President of the Site Association of Industry, Abdul Rehman Fudda, described the fuel price hike as having a “360-degree impact” on the economy. He argued that the increase was largely policy-driven, citing the withdrawal of the Price Differential Claim (PDC) subsidy and the imposition of a petroleum levy, which together added Rs150.83 per litre burden on consumers.
Similarly, Muhammad Ikram Rajput, President of the Korangi Association of Trade and Industry, warned that escalating energy costs could trigger industrial closures, slow economic activity, and drive capital flight as investors seek more stable environments abroad.
Business leaders collectively urged the government to adopt austerity measures, reduce unnecessary expenditures, and ensure fiscal discipline rather than shifting the burden onto the public, emphasizing the need for immediate and effective policy intervention to stabilize the economy.
