Abdul Rehman Fudda, President of the S.I.T.E. Association of Industry, has expressed grave concern over the extraordinary increase in petroleum oil and lubricant (POL) prices by up to Rs55 per liter with immediate effect amid the ongoing tensions between the US and Iran, and has strongly urged the government to immediately reduce taxes on petroleum products.

In a statement, he said that in the present emergency situation, the government should absorb the impact of the increase in international POL prices by cutting petroleum taxes, rather than passing the entire burden on to consumers, warning that failure to provide tax relief on POL would further intensify inflation and economic pressure on industries and the public alike.

He said that the increase will have multiple negative impacts on the country’s economy and will prove detrimental to the overall economy and to industries in particular, as it will lead to a sharp rise in inflation, especially at a time when the country cannot afford it.

Mr. Fudda noted that higher fuel prices would significantly increase transportation costs, while the cost of industrial inputs would also rise. This would make the procurement of raw materials more expensive, ultimately affecting the competitiveness of several industries, especially export-oriented units.

He further said the higher cost of essential goods would inevitably raise the overall cost of living, affecting all segments of society, particularly those living on or below the poverty line. “The price hike had been implemented proactively despite the fact that existing fuel stocks had been purchased at relatively lower prices,” SAI president pointed out.

Abdul Rehman Fudda suggested that, along with other measures to reduce POL consumption, the fuel quota of all members of the national and provincial assemblies as well as government officers should be curtailed by at least 50 per cent. He added that consumers of petrol and diesel were already paying approximately Rs 121 and Rs 118 per litre, respectively, in taxes and margins.

In the present emergency situation, SAI president urged the government to absorb the impact of the increase in international POL prices by reducing taxes on petroleum products, instead of passing the entire burden directly onto consumers.