Fuel Hike Sparks Economic Concerns in Pakistan

Karachi: The recent rise in fuel prices is acting as a financial strain on Pakistan’s population and industries, according to Mian Zahid Hussain, a prominent business leader. He highlighted the challenges posed by the government’s decision to increase oil and gas prices despite a decline in international crude costs.

Mian Zahid Hussain, who holds multiple leadership roles in business forums, stated that the combination of new taxes and increased energy costs could harm the nation’s economy. The domestic fuel price hike, he noted, comes at a time when global markets have stabilized after the Iran-Israel conflict, raising questions about the rationale behind the government’s pricing strategy.

Addressing the business community, Hussain criticized the government’s reliance on energy prices for revenue generation, pointing out the petroleum levy increase despite falling international crude prices. He argued that expensive fuel will exacerbate inflation and raise production costs, negatively impacting both industries and households.

Hussain attributed the petroleum levy increase to directives from the International Monetary Fund. He criticized the government’s failure to tackle systemic issues like gas theft and line losses, which have instead shifted the financial burden onto consumers and businesses.

He warned that while the current policy might boost short-term revenue, it could hinder long-term economic growth. Hussain contrasted Pakistan’s approach with that of other countries, noting that many governments are subsidizing energy or maintaining stable prices to combat inflation and revitalize industries.

Hussain highlighted the need for urgent reforms, citing India’s stable oil prices and Bangladesh’s reduction in fuel costs as examples. He emphasized that without addressing widespread issues such as circular debt and electricity theft, price increases would only provide temporary relief and potentially worsen theft and non-payment.

He urged the government to adopt transparent and realistic policymaking to foster trust and drive improvements in the energy sector. Without such measures, he warned, high energy costs will continue to impede Pakistan’s economic recovery.