Faheem Saigol says hike comes at a time when industries grappling with high input costs
ISLAMABAD, MAR 8: /DNA/ – The Pakistan Industrial and Traders Associations Front (PIAF) has sharply criticized the government’s recent decision to raise petrol and diesel prices by over 21 percent, calling it “unjustified” and warning that it could intensify inflation, increase production costs, and undermine Pakistan’s fragile export sector.
PIAF Chairman Faheemur Rehman Saigol, who also serves as President of the Lahore Chamber of Commerce and Industry, said the hike comes at a time when industries are already grappling with high input costs and shrinking margins.
Speaking to reporters, Fahee Saigol noted that the government raised fuel prices while old oil stocks, purchased at lower prices, are still in reserve. “This burden could have been avoided entirely,” he said. “If price adjustments are to be made, a proper review should have been conducted. Passing on costs now only hurts consumers and industries alike.”
PIAF Vice Chairman Tahir Manzoor Chaudhary and Senior Vice Chairman Nasrullah Mughal echoed the chairman’s concerns, highlighting the potential economic consequences of the hike. They warned that rising fuel costs would immediately increase inland freight charges, impacting the transportation of goods across the country. He noted that inland freight for shipments between Karachi and Central Punjab could surge by 25 to 30 percent, increasing the cost of textiles, Pakistan’s largest export sector.
The PIAF leadership stressed that higher energy costs would also push up inflation, adding to the financial strain on households and small businesses. Consumer prices, which have already risen to a 16-month high of 7 percent last month, are expected to climb further, analysts said. “Middle-class families and small enterprises are already struggling with daily expenses. This fuel price increase will directly hit their wallets and reduce purchasing power,” said Chaudhary.
Faheem Saigol warned that the industrial sector could face additional challenges if gas supplies are disrupted. “Qatar has reduced gas production, and any shortage will affect manufacturing, particularly in energy-intensive sectors such as textiles and chemicals. This will not only raise costs domestically but may also slow down exports,” he said.
The PIAF officials also raised concerns about Pakistan’s widening trade deficit. With the country importing petroleum products worth $16 billion last year, every spike in international oil prices increases the import bill significantly. “A $5 rise in global oil prices adds nearly $1 billion to Pakistan’s import costs. At a time when exports are already declining, this could put additional pressure on the current account and the rupee,” Mughal explained.
The association emphasized that sudden hikes in fuel prices could also affect investor confidence. Faheem Saigol said, “Industries need stability to plan production, manage costs, and export competitively. Unpredictable energy pricing undermines investment and creates uncertainty in the business environment.”
PIAF has called on the government to adopt a more balanced and phased approach to energy pricing. They urged policymakers to ensure that price adjustments are linked to actual import costs and to provide relief measures for industries and vulnerable consumers. “A strategic review should be conducted before implementing increases, and any adjustments should consider the timing of existing stock and international market fluctuations,” Saigol recommended.
The association also highlighted the potential impact on Pakistan Railways and domestic logistics. Freight charges have already been adjusted upward, with goods transportation rates increasing by 9 percent and passenger fares by 5 to 10 percent. PIAF said such adjustments, compounded with fuel hikes, will escalate the overall cost of doing business in Pakistan.
The PIAF leadership stressed the need for dialogue between the government and industrial stakeholders to address energy pricing in a way that protects both the economy and consumers. “We are committed to supporting growth and exports, but these measures must be carefully calibrated. Otherwise, industries will bear the brunt, inflation will rise, and economic recovery will slow,” Saigol said.
