Business Recorder
KARACHI: Business and industrial community has termed the massive increase in petroleum price a bomb on public, business and industries and they urged the government to end taxes on petroleum products. They also demanded immediate reversal of “unjust” fuel price hike and said soaring inflation to squeeze middle class, industries at risk of shutdown. They rejected the increase in petrol prices to Rs 137 per liter and said that the purchasing power of the people was already severely affected, due to which the business community was facing difficulties. The Pakistan Business Forum (PBF) has expressed serious concern over the recent increase in petroleum prices and the sharp rise in petroleum levy, stating that fixing the levy at Rs 160.61 per litre under prevailing extraordinary circumstances is unjustified and places an undue burden on the public and the business community. Chief Organiser PBF, Ahmad Jawad said the new diesel price has severely impacted the agricultural sector, making crop sowing increasingly unviable at current cost levels and this could also heighten the risk of losses during the wheat harvesting season. It further noted a contradiction between the prime minister’s recent indication of targeted subsidies and the subsequent imposition of measures that effectively translate into an economic strain on the public within hours. The PBF stated that such measures cannot be termed fiscal discipline, highlighting that within a span of just 30 days, petrol prices have increased by a cumulative 63 percent, while diesel has surged by 75 percent. The Forum questioned whether, after contributing over Rs 11 trillion in taxes in the previous fiscal year, the public and business community are not entitled to even one percent of that amount being spent on their relief during extraordinary times. The Forum also raised concerns over the non-utilisation of the emergency fund allocated in the federal budget. It emphasised that both federal and provincial governments had the capacity to cushion the impact of rising fuel prices. Development funds, it suggested, could have been partially redirected towards petroleum subsidies, while provinces could have collectively extended a support package of up to Rs 300 billion to the federation. The PBF cautioned that these decisions are likely to trigger a fresh wave of inflation, with prices of essential commodities expected to rise and remain elevated. It urged the government to temporarily suspend revenue-driven considerations and prioritize public relief. Jawad called for the immediate abolition of the petroleum levy, reducing it to zero without delay. He further demanded that import duty and carbon levy on diesel be waived for at least one month to provide meaningful relief to both consumers and businesses. The Forum also termed the proposed motorcycle subsidy as impractical and difficult to implement. Instead, it recommended declaring weekly holidays on Mondays and Fridays rather than altering market hours, in order to ease pressure on the trading community during these challenging times. Additionally, the PBF proposed reducing the General Sales Tax (GST) to 10 percent for a period of two months and suspending the monthly Fuel Price Adjustment (FPA) in electricity bills for the same duration to offer immediate relief to consumers. While acknowledging the difficult economic situation, PBF stressed the need for out-of-the-box policymaking. It noted that Pakistan’s per capita income does not support the current level of fuel prices, and therefore, non-tax revenue generation should not be prioritized in such extraordinary circumstances. Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan and Chairman Policy Advisory Board FPCCI, has expressed deep concern over the federal government’s decision to sharply increase petroleum prices, following the joint press briefing by Federal Minister for Finance Muhammad Aurangzeb and Federal Minister for Petroleum Ali Pervaiz Malik. The government has raised the price of petrol by Rs 137.24 to reach Rs 458.40 per liter, while high-speed diesel (HSD) has seen a staggering increase of Rs 184.49, bringing it to Rs 520.35 per liter. This unprecedented adjustment, triggered by global energy volatility and the Middle East conflict that has pushed global diesel above USD 250 per barrel, threatens to dismantle the fragile economic stability achieved over the past year. Mian Zahid Hussain said that the impact of this decision on the cost of doing business will be catastrophic, particularly for the industrial sector, which is already struggling with high power tariffs and interest rates. High-speed diesel is the backbone of the country’s transport and agriculture sectors; such a massive hike has led to a vertical increase in freight charges and production costs as Pakistan Goods Transporters have announced a 60 percent hike in fares. Pakistani exports, already facing stiff competition in international markets, will become uncompetitive due to the surge in logistics and operational costs. The government must realize that the industrial wheel cannot turn under the weight of such exorbitant energy costs, risking the shutdown of small and medium enterprises and a subsequent rise in unemployment. Mian Zahid Hussain also noted that the Inflation, which was recorded at 7.3 percent in March 2026, is now expected to spiral into double digits as the second-round effects of this fuel hike permeate through the supply chain. The commoner, already burdened by a high cost of living, will face an unbearable increase in the prices of essential food items and daily commodities. While the government has announced a targeted subsidy of Rs 100 per liter for motorcyclists and direct support of Rs 70,000 per month for trucks and Rs 80,000 for heavy-duty vehicles, these measures are temporary palliatives that do not address the systemic inflationary pressure. The middle class is being squeezed out of the economy, and the purchasing power of the masses is depleting at an alarming rate. Mian Zahid Hussain said there is an urgent need to diversify energy imports and accelerate the transition to renewable energy sources to reduce vulnerability to global oil-market shocks. Furthermore, the government should drastically reduce non-developmental expenditures and administrative costs to provide genuine fiscal space for industrial relief. A more robust and transparent mechanism for targeted subsidies is required to ensure that the most vulnerable segments and key export-oriented industries are shielded from the full impact of global price hikes. Mian Zahid Hussain also suggested that the way forward lies in a collaborative approach between the government and the business community to devise a sustainable economic strategy. The current practice of weekly or fortnightly price revisions creates a climate of uncertainty that discourages investment and disrupts planning. The government must focus on enhancing the productivity of the agricultural and industrial sectors through direct incentives and by ensuring a stable, affordable energy supply. Only by reducing the “cost of living” and the “cost of doing business” simultaneously can Pakistan navigate this global energy crisis without compromising its economic sovereignty or social stability. Copyright Business Recorder, 2026
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