Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Wednesday said oil-producing countries have decided to reduce oil production to increase their profits. He said the decision would make oil more expensive, and inflation would increase worldwide, including in Pakistan. He said rich countries are plunging the world into a new crisis to acquire additional wealth.
Talking to the business community, the veteran business leader said that Russia has recently announced a reduction in oil production by 500,000 barrels to increase its profits, providing resources for war and punishing countries working against it. Soon after Russia, OPEC Plus also announced a reduction in oil production of more than one million barrels per day, increasing inflation and people’s problems worldwide and further reducing global growth.
He said the move would also undermine global efforts to reduce inflation. According to an estimate, reducing production by oil-producing countries may increase the oil price per barrel by up to ten dollars, increasing the burden on oil-importing countries.
The business leader noted that by the end of this year, the price of oil will be 95 dollars, while in 2024 it will increase to 100 dollars.
Mian Zahid Hussain said that inflation had started to decrease in many countries, and the people breathed a sigh of relief. However, the oil-producing countries had taken a unilateral decision that surprised the world.
As oil becomes more expensive, inflation will increase, bond markets and currencies of many countries will be affected, and many countries, including the United States and Europe, will have to raise interest rates further.
He said that the recent one percent increase in the interest rate by the State Bank of Pakistan would increase the base interest rate to 21 percent, and the bank spread to 25 percent, making it impossible to do business.
Businesses will start going bankrupt, while bank loans in the industry, business, home finance, car leasing, etc., will be stuck. He said that to escape this difficult situation, Pakistan must develop its agriculture and rapidly progress on solar and wind power to reduce the oil import bill.