Lahore: The Pakistan Industrial and Traders Associations Front has rejected jump in prices of petroleum products for the second consecutive month despite the fact that inflation rate touched 9.30 percent in July mainly due to more than 65 percent record jump in fuel prices last month, warning the authorities that inflation above 6 percent could hurt economic growth.
In a joint statement, with senior vice chairman Nasir Hameed and vice chairman Javed Siddiqi, Mian Nauman Kabir said that for the month of August, the government increased the price of petrol by Rs3.86 per litre, high speed diesel by Rs5 per litre, kerosene oil by Rs 5.97 per litre and light diesel oil by Rs6.62 per litre.
Mian Nauman said that the high speed diesel is used mostly in the transport and agriculture sectors. Therefore, any increase in its price will lead to inflationary impact. Kerosene oil price has also gone up Rs5.97 per litre, which is used in remote areas where liquefied petroleum gas is not available for cooking purposes. So, any increase in its price will have an impact on the life of the poor. The price of light diesel oil has been hiked by Rs6.62 per litre, which is used in industries and its price goes up to Rs62.86 per litre against Rs56.24 per litre.
Mian Nauman Kabir said that oil prices and inflation are closely connected in a cause-and-effect relationship. As fuel rates move up, inflation, which is the measure of general price trends throughout the economy, follows in the same direction upward. On the other hand, if the rates of fuel fall, inflationary pressures start to drop.
He urged the government to take concrete measures for easing out inflation that has further increased due to rise in oil prices and other essential commodities. He said that inflation is on higher side due to the impact of government’s economic policies of soaring fuel rates, enhancing power and gas tariff, depreciating the local currency and imposing exorbitant duties on imported industry raw material.
Mian Nauman called for putting the economy on a balanced and sustainable growth trajectory, addressing the underlying structural vulnerabilities, as low export growth, limited foreign exchange reserves, documentation of economy and higher food inflation are still major challenges to the economy.
Referring the data of Pakistan Bureau of Statistics, PIAF chairman said that the country’s overall inflation reached 9.30 percent year-on-year in July, which is the highest inflation rate since March 2020. In March 2020, the inflation rate was 10.20 percent but it declined in the subsequent months and had touched 8.59 during June. Once again it has increased to 9.30 during the month of July.
The inflation increased mainly due to abnormal fuel price increase by the government on June 26. For the month of July the government had increased the oil prices by up to 66.09 percent and hiked the price of Motor Spirit by Rs 25.58 per litre (34.33 percent), HSD by Rs 21.31 per litre (26.59), Superior Kerosene Oil by Rs 23.50 (66.09 percent), Light Diesel Oil by Rs 17.84 per litre (46.78 percent). The massive increase in oil prices had resulted in increase in inflation. Similarly, during last week of July, the prices of vegetables and meat increased due to Eid-ul-Adha which has also contributed to high inflation during the month. For the month of August the fuel prices had been further increased by the government and experts believe that the inflation will further soar during the month of August.
PIAF senior vice chairman Nasir Hameed asked the Ministry of Finance to devise a strategy to control and ease out the impact of inflation. He said that downward trajectory in crude oil in the global market should result in downward pattern in domestic prices.
Nasir Hameed said that the outcome of stabilization policies, agriculture sector interventions, rigorous monitoring at federal and provincial levels and favourable weather can bring in better results in easing out inflation and sustain the economy towards growth and productivity.
PIAF vice chairman Javed Siddiqi said provincial governments monitoring display of price list and quality of items in open market and effective measures of CCP to control cartelization and undue profiteering can also control the inflation to some extent.