By Our Correspodent
LAHORE: Lahore Chamber of Commerce and Industry (LCCI) Senior Vice President Tanveer A. Sheikh has expressed serious concern over the latest increase in petroleum product prices, warning that the move will place a fresh burden on industry and trade already struggling with high energy and operating costs.
Sheikh urged the government to review the increase and explore measures to provide relief to businesses and consumers, saying repeated increases in fuel prices have repercussions across virtually every sector of the economy.
According to the LCCI, petrol has become Rs12.90 per litre more expensive, taking its price to Rs358.77 per litre, while the price of high-speed diesel has increased by Rs3.72 per litre.
Sheikh said the latest increase had come at a difficult time for businesses, particularly manufacturers that were already facing high electricity and gas tariffs, expensive financing, taxation and other production-related expenses.
He said petroleum prices had a direct bearing on transportation and logistics costs, but their impact extended far beyond the transport sector.
“When petroleum prices rise, the cost is ultimately transmitted throughout the supply chain,” Sheikh said, adding that higher transportation expenses increase the cost of moving raw materials to factories and finished goods to markets.
He said the resulting increase in production and distribution expenses could also push up the prices of essential commodities and other consumer goods, adding to the financial pressure on households.
The LCCI senior vice president said the situation was particularly concerning for Pakistan’s export-oriented industries, which compete in international markets where even relatively small differences in production and logistics costs can affect competitiveness.
Higher fuel costs, he said, would make Pakistani products more expensive to manufacture and transport, potentially weakening their ability to compete with goods produced by regional and international competitors.
Sheikh stressed that improving the competitiveness of local industry was essential for increasing exports, generating foreign exchange, attracting investment and creating employment.
He said policymakers should therefore carefully assess the broader economic impact of decisions that increase the cost of doing business.
The LCCI official also highlighted the inflationary consequences of higher petroleum prices, saying businesses could not indefinitely absorb increases in transportation, energy and production costs.
When such costs become unsustainable, he said, at least part of the burden is eventually passed on to consumers through higher prices.
Sheikh said small and medium enterprises were particularly vulnerable because many operated with limited financial resources and relatively narrow profit margins. A sustained increase in input and transportation costs could make it increasingly difficult for such businesses to maintain production, retain workers and remain competitive, he added.
He called for a comprehensive approach to petroleum pricing that takes into account not only revenue considerations but also the impact on industrial production, exports, employment, inflation and consumer purchasing power.
Sheikh said the business community recognised the fiscal and economic challenges facing the country, but stressed that policies should facilitate productive sectors rather than add to their operating burden.
He urged the government to examine the taxation and other components incorporated into petroleum prices and identify areas where relief could be provided without undermining broader fiscal stability.
The LCCI senior vice president said affordable energy and transportation were fundamental to industrial growth and economic activity. Reducing unnecessary business costs, improving energy-sector efficiency and maintaining predictable economic policies could help restore business confidence and encourage investment, he added.
Sheikh urged the government to engage with the business community and formulate measures that balance fiscal requirements with the need to protect industry and consumers from excessive cost pressures.
He said sustained industrial and export growth required a competitive cost environment, warning that continued increases in essential business inputs could ultimately affect investment, employment, exports and overall economic activity.
Meaning: The LCCI’s concern reflects the economy-wide effect of fuel prices, which influence freight, manufacturing, distribution and consumer prices rather than affecting motorists alone.
Impact: Higher petroleum prices could raise operating costs for manufacturers and traders, while businesses may pass some of those costs on to consumers.
Pakistan angle: With Pakistan seeking stronger exports, industrial expansion and investment, the LCCI argues that controlling production and logistics costs is critical to keeping domestic manufacturers internationally competitive.
