LAHORE: The Lahore Chamber of Commerce & Industry has expressed serious concern over the sharp increase in international oil prices and its direct impact on Pakistan’s industrial sector, warning that if urgent corrective measures are not taken, many industries may face severe operational disruptions within the next two to three months.
LCCI said that the increase in oil prices is not only raising transportation and energy costs, but is also pushing up the prices of essential industrial raw materials by 30 percent to 100 percent. This sudden escalation is creating immense pressure on manufacturers across multiple sectors, as industries now require substantially higher working capital in rupee terms just to purchase the same quantity of raw material as before.
The Chamber noted that if industries are not facilitated immediately, many manufacturers may be forced to reduce production or temporarily shut down due to shortage of working capital. This situation could seriously disturb supply chains and create shortages of several daily-use products in the local market.
LCCI emphasized that this is not an isolated issue affecting only a few sectors. The impact is broad-based and threatens industries linked with food, pharmaceuticals, home care, packaging, and consumer goods. For example, the cost of plastic resin has increased significantly. If manufacturers are unable to procure adequate quantities of such raw materials, the packaging of processed and packaged foods may be affected, resulting in supply issues in the market. A similar challenge is emerging in pharmaceutical products, home care items, and many other essential goods.
The Lahore Chamber urged the State Bank of Pakistan to take immediate notice of the situation and introduce emergency support measures for industry. These measures should include:
• enhancement in existing credit limits by at least 50 percent,
• easier access to working capital financing, and
• reduction in interest rates to enable businesses to sustain production and manage rising costs.
LCCI stated that in the present situation, maintaining existing credit limits is no longer sufficient because the cost of maintaining the same inventory levels has risen sharply. Without an increase in financing support, industries will struggle to continue operations, which may eventually lead to shortages of essential goods and further pressure on inflation.
The Chamber said that timely intervention by the central bank and relevant authorities is crucial to protect industrial output, safeguard employment, and ensure uninterrupted availability of products of daily use in the market. LCCI warned that if this issue is not addressed on priority, the country may witness production slowdowns, supply bottlenecks, and non-availability of essential items within the coming months.
The Lahore Chamber of Commerce & Industry called upon policymakers to respond with urgency and develop a coordinated strategy to support industry during this difficult period, so that businesses can continue operating and the economy can avoid further instability.
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