LAHORE Feb 13 (TNS): The Businessmen Panel (BMP) says Pakistan’s economy will most likely be faced with tougher challenges in the second half of the current fiscal year as it remains heavily dependent on imported fuel oil whose prices are steadily on the rise, and in view of this Pakistan’s annual inflation climbed to 4.4 per cent in January from 3.7pc in the same month last year mainly due to hike in petroleum prices
Chairman BMP, Mian Anjum Nisar said good days seem to be over as second half’s (January-June 2018) import bill will be significantly higher than the first half of current fiscal year 2017-18. He said Petroleum goods remain heavily taxed to make up a significant chunk of the revenue collected by the government and we will not stand for the economic murder of the country.
Nisar said high oil prices mean that Pakistan’s export competitiveness goes down and our exports already falling, this is something the country can ill afford. It also raises questions about the decision to depreciate the Pakistani rupee. The logic of depreciation was to make the export sector more competitive but in an import-dependent economy, depreciation is likely to increase domestic prices by a similar amount. The petrol price had to go up simply because the value of Pakistani currency has gone down and petrol is an imported good.
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The only way to control its price is to reduce the tax charged to consumers.
Secretary General (Federal) BMP, Ahmad Jawad further said the country’s energy import bill has already risen heftily as global oil prices have spiked by almost a third in the last several months… it’s likely to increase considerably going forward.
He told rising oil prices will add to pressure on the country’s forex reserves, widen trade gap as we spend more on the energy import bill, push domestic power prices, increase the already high cost of doing business affecting export competitiveness, expand budget deficit, spike inflation and squeeze household incomes.
Jawad also added “It is not good news for Pakistan whenever oil goes up our economy tanks, as rising prices will have consequences for the embattled PML-N in an election year”. He further viewed instead of taking a hard decision; the then premier chose to partially pass on the impact of lowering prices to domestic consumers, who had already absorbed the expensive oil in their monthly budgets for political reasons”. The revenues collected thus could have been used for developing and restructuring the economy, and it would have been in a much better shape now to face the shock of rising crude oil prices.”
