KARACHI: The business community has urged the government to review the existing tax and levy structure on petroleum products and reconsider its policy of revising fuel prices on a daily basis, saying frequent price changes are making it increasingly difficult for businesses to determine production costs and plan commercial activities.
Korangi Association of Trade and Industry (KATI) President Muhammad Ikram Rajput said frequent increases in petroleum prices were creating significant difficulties for industry and adding to economic uncertainty rather than promoting stability.
He noted that petrol and diesel prices had risen by approximately Rs22 and Rs14, respectively, over the preceding three days, placing an additional burden on consumers already facing high inflation.
According to government data, taxes, duties and levies account for around 37 per cent of the price of petrol and 31 per cent of the price of diesel. Rajput said the government should review the existing tax and levy structure instead of passing the full impact of fluctuations in international petroleum prices directly on to consumers and industry.
He also stressed that any decline in international oil prices should be reflected in domestic prices without delay. “It is not acceptable for increases to be passed on immediately while reductions are delayed,” he said.
Rajput called on the federal government to reconsider daily petroleum price revisions and, after consultation with representatives of the industrial, commercial and transport sectors, introduce a transparent and predictable pricing mechanism to protect businesses, consumers and the broader economy from excessive price volatility.
SITE Association of Industry President Abdul Rehman Fudda also urged the government to abandon the daily pricing mechanism and introduce a 15-day petroleum pricing cycle.
He said a fortnightly pricing mechanism would enable industrialists to better assess production costs, plan operations and enter into commercial agreements with greater certainty.
Fudda warned that repeated fuel price increases were particularly damaging at a time when the government was seeking to boost exports, attract investment and improve the ease of doing business.
Meanwhile, Federation of Pakistan Chambers of Commerce & Industry (FPCCI) President Atif Ikram Sheikh expressed serious concern over the impact of volatile global oil prices on Pakistan’s macroeconomic stability.
He said successive international oil shocks, combined with high domestic petroleum levies, were undermining the country’s export competitiveness, widening the trade deficit and increasing the risk of industrial closures.
“On the one hand, committees are being formed and commitments are being made to increase exports and facilitate businesses, while on the other hand, policies are being pursued that are making it increasingly difficult for industries to remain operational,” he said.
Sheikh added that small and medium-sized enterprises (SMEs), which are already operating under difficult conditions, were being pushed further into financial distress by rising energy and operating costs.
