Key Takeaways
- Petroleum products: Industry leaders warn of potential disaster for manufacturing and exports.
- Daily price revisions could increase uncertainty, making long-term planning difficult.
- SMAP and SITE Association call on government to fix prices at least monthly.
The business community in Pakistan has strongly urged the Prime Minister Shehbaz Sharif and the Minister for Petroleum Ali Pervaiz Malik to withdraw their decision to introduce daily pricing of petroleum products. The move, according to industry leaders, could prove disastrous for the country’s industrial and export sectors.
Abdul Rehman Fudda, President of SITE Association of Industry, expressed serious reservations over the government's decision, warning that it could trigger a fresh crisis for Pakistan’s industrial and export sectors. He highlighted that the manufacturing sector is already under immense pressure due to high electricity and gas tariffs, excessive taxation, and steadily rising production costs.
Fudda proposed that petroleum prices should be fixed at least on a monthly basis to provide businesses with a predictable operating environment. He suggested that if international oil price volatility creates fiscal pressure, the government could temporarily adjust the petroleum levy rather than passing daily price fluctuations onto industry. His appeal was directly directed to Prime Minister Shehbaz Sharif, urging him to take the concerns of the business community seriously.
Ismail Suttar, founder chairman of the Salt Manufacturers Association of Pakistan (SMAP), echoed similar sentiments. He warned that introducing daily fluctuations in petroleum prices would further escalate production costs and disrupt business planning. Suttar noted that export-oriented industries were particularly vulnerable because export contracts are typically finalized several months before delivery. Continuous price fluctuations during this period, he said, would significantly increase manufacturing and logistics costs, making it difficult for Pakistani exporters to remain competitive in international markets.
The two biggest challenges confronting Pakistan’s industrial sector, according to Fudda, are expensive energy and policy uncertainty. He emphasized that if manufacturers wake up every morning unsure of fuel prices and production costs, they cannot effectively price their products, manage inventories or make investment decisions. Suttar added that domestic manufacturers also face practical constraints as they could not revise product prices on a daily basis to absorb rising input costs.
The business community’s concerns reflect the broader economic challenges faced by Pakistan. High electricity and gas tariffs, elevated taxation, and rising operational costs have already put significant pressure on industries. Daily price revisions would add another layer of uncertainty, making long-term planning and cost management increasingly difficult. The government's decision to introduce daily pricing has thus raised fears among industry leaders that it could undermine the stability needed for sustainable economic growth.
In response to these concerns, Prime Minister Shehbaz Sharif and relevant policymakers are expected to carefully consider the implications of their policy decisions. They must balance the need for fiscal flexibility with the practical needs of businesses and the broader economy. By adopting a stable and predictable pricing mechanism, they can protect industrial activity, safeguard exports, and preserve employment in Pakistan’s manufacturing sector.
The two biggest challenges confronting Pakistan’s industrial sector are expensive energy and policy uncertainty.
Abdul Rehman Fudda, President of SITE Association of Industry
If manufacturers wake up every morning unsure of fuel prices and production costs, they cannot effectively price their products, manage inventories or make investment decisions.
Abdul Rehman Fudda, President of SITE Association of Industry
