ISLAMABAD, AUG 19: The All Pakistan Business Forum on Friday demanded of the government to pass on relief of cut in oil prices in the global market to the industry, besides bringing key policy rate to a regionally competitive level.
APBF President Syed Maaz Mahmood expressed his concern over the increase in fuel prices despite downward trend in international market. The present government came into power to give relief to the masses, which should be its top priority, as the hike in petroleum prices will trigger inflation in the country. He said that it was beyond comprehension that why prices were raised despite a reduction in oil prices at the international level, adding that the government should have mercy on poor masses and give them some relief.
The APBF members expressed their serious concern over the hike in petroleum products despite the fact that crude oil prices have plunged to below $90 a barrel while the rupee has jumped by around Rs28 versus dollar during the last fortnight.
APBF Chairman Ibrahim Qureshi demanded the government to reduce petroleum prices without any delay.
He demanded that the government should slash the prices of the petroleum products immediately as the international oil prices have substantively come down; and, the benefit needs to be shifted to the masses.
He noted with a sigh of relief that oil prices are now under $90 per barrel. The move will bring down the inflation in a much more effective and tangible manner than raising the interest rate to a 14-year high of 15 percent, he added.
Ibrahim Qureshi emphasized that the full force of the multiplier effect of the raise of the petroleum products has not yet materialized in Pakistan and inflation will keep rising in coming weeks if the relief from international market is not shifted to the end consumer.
APBF President Syed Maaz Mahmood said after Russia attacked on Ukraine, experts were predicting that oil prices could reach $190 a barrel, a price that would send the costs of shipping and transportation into the stratosphere and bring the global economy to its knees.
Now oil prices are lower than they were when the war began, having dropped more than 25 percent in barely one and half months. The news of a slowing Chinese economy and a cut in Chinese interest rates sent prices down further, to less than $90 a barrel. That should translate eventually to lower prices for things so that cost of production could come down to a regionally competitive level.
He explained that global macroeconomic sentiments are not optimistic and growth forecasts have been significantly lowered to the tune of being recessionary; and, the phenomenon may drive the international oil prices even lower than $90 per barrel in coming weeks. However, he maintained, we have to tread a cautious path and gradually but progressively lower the domestic petroleum prices.
He called for the prudent and diligent regulation of the markets to allow the country to benefit from the downward trends in international oil prices, edible oils and initial signs of receding supply constraints in some other commodities.