Reduction in Petroleum Levy, Action Against Hoarders, Price Hike Will Fuel Inflation and Raise Business Costs, President KATI
KARACHI: (www.thenewslark.com) The President of Korangi Association of Trade and Industry (KATI), Muhammad Ikram Rajput, has expressed serious concern over the recent sharp increase in petrol and diesel prices, describing it as a “petrol bomb” on the public and the national economy.
Rajput said the nearly Rs55 per litre increase around 20 percent in petroleum product prices is deeply alarming for citizens and the business community already burdened by rising inflation. He noted that the sudden surge in fuel prices would further intensify economic pressures across the country.
Rajput said the government has linked the increase to global developments, particularly tensions between Iran and Israel and fears of disruption in supplies through the Strait of Hormuz. However, he pointed out that the government is already collecting between Rs105 and Rs120 per litre in the form of petroleum levy, taxes, commissions and other charges on fuel. Due to this heavy tax burden, he added, petroleum prices in Pakistan are already higher than in several countries in the region.
The KATI president noted that while global oil prices have experienced fluctuations due to geopolitical tensions, major economies such as China, India and Japan which obtain roughly 40 percent, 80 percent and 90 percent of their oil respectively through the Strait of Hormuz have not immediately passed such a significant burden on to their consumers. In contrast, he said, the abrupt increase in Pakistan has placed additional financial strain on the public.
Rajput said government data indicates that Pakistan currently holds oil reserves sufficient for about 28 days, purchased at previous prices, with an estimated volume of around 11.4 million tons. If the Rs55 per litre increase is applied to these existing stocks, it would translate into an additional burden of billions of Rupees on consumers.
He stressed that such decisions are particularly painful at a time when the public is already grappling with record inflation and declining purchasing power. According to Rajput, increases in petroleum prices do not only affect fuel costs but also have far-reaching consequences across the entire economy.
“Higher fuel prices lead directly to increased transportation costs, which in turn raise the prices of essential commodities, raw materials and manufactured goods,” he said, adding that a new wave of inflation would likely follow, with the most severe impact falling on low- and middle-income households.
The KATI president also voiced concern over reports that some market players have begun hoarding petrol following the price hike, creating an artificial shortage.
He urged the government and relevant authorities to take immediate and strict action against hoarders and profiteers to ensure uninterrupted fuel supply to consumers.
Rajput further noted that the government’s decision to shift the petroleum price adjustment mechanism from a fortnightly to a weekly basis has created uncertainty in the market. This change, he said, makes it difficult for both consumers and businesses to estimate future costs and plan accordingly.
Frequent price announcements, he warned, are also encouraging speculation, hoarding and artificial shortages. Oil marketing companies and petroleum dealers, anticipating further increases, have reportedly begun storing fuel stocks.
The KATI president called on the government to provide immediate relief by significantly reducing the petroleum levy and easing the tax burden on fuel. He said that meaningful tax reductions could substantially lower petroleum prices and help ease inflationary pressures on the economy.
Rajput emphasized that stabilizing fuel prices is critical for maintaining economic activity and protecting both consumers and businesses from further financial strain.
