DNA
LAHORE: Pakistan Industrial and Traders Associations Front (PIAF) Chairman Faheemur Rehman Saigol, who is also President of the Lahore Chamber of Commerce and Industry (LCCI), has strongly criticised the government’s decision to increase the petroleum levy on petrol and high-speed diesel while maintaining existing fuel prices, warning that the move will further increase the cost of doing business, intensify inflationary pressures and undermine the competitiveness of Pakistan’s industrial and trade sectors.
In a joint statement with PIAF Senior Vice Chairman Nasrullah Mughal and Vice Chairman Tahir Manzoor Chaudhry, he said the decision has disappointed the business community because it comes at a time when international crude oil prices have eased, creating an opportunity for the government to provide meaningful relief to industries, transporters, farmers and consumers. Instead, the authorities have chosen to increase the petroleum levy, effectively retaining the financial burden on productive sectors of the economy.
Faheemur Rehman Saigol said petroleum products constitute one of the most important cost components for manufacturing, transportation, agriculture, construction and commercial activities. Every increase in fuel-related taxation directly raises freight charges, distribution expenses and production costs, eventually making locally manufactured goods more expensive in both domestic and export markets.
He said the country’s industrial sector is already facing multiple economic challenges, including high electricity tariffs, elevated financing costs, expensive raw materials, liquidity constraints and subdued domestic demand. Under these circumstances, additional taxation on petroleum products will further squeeze industrial margins and discourage fresh investment at a time when economic expansion should be the government’s foremost priority.
The PIAF chairman observed that industries were expecting some reduction in domestic fuel prices after the decline in international oil markets. Lower fuel costs could have helped businesses reduce operational expenses, improve productivity and restore some competitiveness in export-oriented sectors. However, by increasing the petroleum levy, the government has effectively neutralised the potential benefit arising from softer global oil prices.
He said transport costs influence the prices of virtually every commodity, including food items, industrial inputs, construction materials and consumer goods. As transportation becomes more expensive, inflationary pressures spread across the entire economy, reducing consumers’ purchasing power and increasing the financial burden on businesses as well as ordinary households.
Nasrullah Mughal said frequent reliance on petroleum levies to generate government revenues is not a sustainable fiscal strategy. While the business community understands the government’s financial constraints, increasing indirect taxation on essential fuels ultimately weakens productive sectors that contribute to employment generation, exports and long-term revenue growth. A stronger industrial base, he added, would generate more sustainable tax revenues than higher levies on petroleum products.
Tahir Manzoor Chaudhry said exporters are already competing in an increasingly challenging international environment where production costs determine market competitiveness. Additional fuel-related costs make Pakistani products less attractive in global markets by increasing logistics and manufacturing expenses. He added that small and medium-sized enterprises, which form the backbone of the country’s industrial structure, will be among the worst affected because of their limited financial capacity to absorb rising operational costs.
The PIAF leaders said agriculture, which relies heavily on diesel for irrigation, transportation and farm machinery, would also face higher operational expenses. Increased agricultural costs eventually translate into higher food prices, adding another source of inflation at a time when consumers are already struggling with rising living expenses.
