The Biz Update One of Pakistan's Most Reliable Business News Website
Related Articles
KARACHI: Industrialists in Karachi’s SITE industrial area have warned that repeated increases in petroleum prices are putting industries under severe pressure and threatening exports, investment and employment.
SITE Association of Industry (SAI) President Abdul Rehman Fudda said rising fuel prices, expensive energy and heavy taxation were increasing production costs and making it difficult for industries to remain competitive.
He questioned whether the government wanted industries to continue operating and create jobs or leave industrialists with no option but to shut down their plants.
Fudda urged the government to end the daily revision of petroleum prices and introduce a 15-day pricing cycle. He said greater stability in fuel prices would help industrialists, exporters and businesses calculate production costs and make commercial agreements with greater certainty.
Business and industrial representatives have repeatedly called for lower petroleum prices and a review of the existing pricing mechanism. However, the government has again increased diesel and petrol prices by Rs3.72 and Rs12.90 per litre, respectively.
According to Fudda, the latest increases have come at a difficult time for industry. The government is seeking to boost exports, attract investment and improve the ease of doing business. However, rising operating costs are making these objectives harder to achieve.
“On the one hand, committees are being formed and commitments are being made to increase exports and facilitate businesses. On the other, policies are making it increasingly difficult for industries to remain operational,” he said.
The SAI chief said Pakistani manufacturers and exporters were already facing strong competition from regional markets because of high production costs.
Frequent changes in petroleum prices, he added, make it difficult for businesses to accurately calculate costs, set competitive prices and sign new export and commercial contracts.
Small and medium-sized enterprises (SMEs) are particularly vulnerable, as many are already struggling with difficult operating conditions. Large-scale manufacturing units are also facing growing pressure to remain financially viable.
Fudda warned that declining industrial activity would directly affect employment. He said fewer job opportunities, particularly for young people, could worsen social problems and increase insecurity.
Industries are also dealing with high electricity and gas costs, limited water availability, law-and-order challenges and heavy taxation, he noted.
In this situation, Fudda said, government efforts to attract new and foreign investment would have limited results unless existing industries were first stabilized and made more competitive.
He stressed that keeping existing industries operational should be an immediate government priority. A strong industrial base is essential for generating employment, increasing exports, supporting economic growth and creating an environment that attracts investment.
“If existing industries are forced to close, efforts to attract new investment and increase exports will lose their effectiveness,” he said.
Fudda urged the government to take immediate steps to control industrial costs and provide businesses with a stable and predictable policy environment.
