Key Takeaways
- FPCCI president Atif Ikram Sheikh expresses grave concerns over rising oil prices.
- He warns of potential widespread industrial closures and de-industrialization.
- FPCCI proposes a multi-pronged approach to mitigate the impact on exports.
Atif Ikram Sheikh, president of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), has raised serious concerns over the mounting pressure of volatile global oil markets on Pakistan’s macroeconomic stability.
Sheikh highlighted that the combination of international oil shocks and high domestic levies is significantly inflating the cost of high-speed diesel (HSD) and furnace oil, which in turn is crippling the country’s export competitiveness and widening the trade deficit.
The president emphasized that the rising costs are eroding the narrow profit margins of exporters, making it increasingly difficult to secure international orders, and threatening the sustainability of the industrial sector.
Sheikh explained that the prices of HSD and furnace oil are inflating inland logistics, supply chains, the cost of electricity generation, and manufacturing overheads, thereby putting immense pressure on the country’s flagship export sectors.
To address these challenges, FPCCI has proposed a multi-pronged approach. The first step is an immediate suspension of the Petroleum Development Levy (PDL) for export-oriented manufacturing to provide a critical financial buffer and preserve foreign exchange earnings.
Furthermore, the trade body has called for a fast-tracked national transition towards alternative and renewable energy sources. Sheikh stressed the importance of rationalizing overall energy tariffs, bringing them in line with regional competitors such as Bangladesh, Vietnam, and India.
To ease the ongoing liquidity crisis, Sheikh also urged an aggressive reduction of the central bank’s exceptionally high policy rate to provide affordable working capital for industrial production.
The president highlighted that Small and Medium Enterprises (SMEs) — the backbone of the export supply chain — are particularly vulnerable. Without targeted intervention, SMEs are facing an immediate liquidity crisis, leading to inevitable factory closures, shift reductions, and mass unemployment.
Sheikh concluded by emphasizing the urgent need for a dedicated, strategic safety net for exporters to prevent widespread de-industrialization and ensure the sustainability of the country’s export sectors.
The ripple effects of exorbitant freight and transportation costs are eroding the narrow profit margins that exporters rely on to secure international orders.
Atif Ikram Sheikh, President, Federation of Pakistan Chambers of Commerce & Industry (FPCCI)
