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Tag: inflation

  • Energy price hike jolts trade, industry: Businessmen Panel

    Energy price hike jolts trade, industry: Businessmen Panel

    KARACHI: The massive hike in prices of petroleum products and electricity tariff has jolted the trade and industry as high cost would hamper economic activities.

    In a statement on Saturday Mian Anjum Nisar, Chairman of the Businessmen Panel, said that Pakistan’s industry had been harmed by the high cost of doing business, which discouraged investment in capacity and capability and called for easing the burden of heavy taxes on the power sector.

    As the oil prices have been increased by another Rs30/liter and power tariff has gone up by Rs7.9/unit the Businessmen Panel (BMP) of the Federation of Pakistan Chambers of Commerce & Industry has stated that the government has dropped a fuel bomb on the businessmen after it suffered an electric shock to meet the conditions of IMF for the revival of the stalled loan program- a recipe to shake the trade and industry.

    READ MORE: Govt. halts gas supply to export industry: APTMA

    The Businessmen Panel (BMP) chairman and FPCCI former president said that the decision would prove detrimental to the industries due to high cost of doing business and will also open the floodgates of inflation. In addition to making the electricity bills costlier and unaffordable for the consumers, the hike in base tariff would escalate prices of all household goods being widely used in every household, he added.

    The FPCCI former president termed the increase in base tariff unlawful and a violation of NEPRA’s own rules and regulations, as any increase in tariff has to be determined and implemented only after holding public hearings but unfortunately they have solely decided to raise the tariff without holding public hearings, he argued.

    It is to be noted the government has decided to raise the prices of all petroleum products, just a week after making a similar increase – hours after the National Electric Power Regulatory Authority approved a massive increase of Rs7.91 per unit in the power tariff. Now petrol is available at Rs209.86 per litre, high-speed diesel (HSD) at Rs204.15, kerosene oil at Rs181.94 and light diesel oil at Rs178.31.

    With the new hike in the power tariff, the price of a unit is expected to move upwards from Rs16.91 to Rs24.82.

    READ MORE: SITE industrialists reject increase in power tariff, POL prices

    Despite an inevitable increase in the prices that will unleash a strong wave of inflation, the coalition government remains short of clinching a deal with the International Monetary Fund that still requires an agreement on the budget for fiscal year 2022-23.

    On the other hand the NEPRA has increased the electricity rates mainly on account of fuel prices, capacity cost payments and the impact of rupee devaluation against the US dollar.

    The base tariff has gone up to Rs24.82/kWh — higher by Rs.7.9078/kWh than the earlier determined national average tariff of Rs16.91/kWh — determined by the power regulator for the ongoing financial year.

    This is the highest average tariff rate for power consumers.

    He condemned the National Electric Power Regulatory Authority’s decision to increase electricity tariffs, stating that the burden of power theft, mismanagement, and inefficiencies cannot be shifted to consumers on the pretext of fuel adjustment.

    Anjum Nisar stated that the constant increase in power tariffs on the pretext of fuel adjustment had increased electricity prices and added to the already high cost of trade and industry. Seeking comparable energy tariffs for domestic industries in order to capture the global market, he stated that due to high electricity rates, power theft became rampant as the tariff was unaffordable to consumers.

    He urged the power ministry to identify system constraints and communicate targets to all concerned departments in order to launch a wartime effort to upgrade the transmission system.

    READ MORE: Yarn merchants for reducing utility prices to save industry

    He urged the completion of all ongoing power projects well ahead of schedule. He stated that business-friendly policies must be adopted, similar to those adopted by other neighboring countries in the region.

    He suggested that the amount specified in trade policy be used to promote exports by providing incentives to trade and industry and by exploring new markets. According to the BMP Chairman, Pakistan’s electricity prices were already on the high side, which was the primary reason for the country’s price hikes. He stated that providing affordable electricity would assist in lowering production costs, thereby benefiting the public. He stated that rising imports and a widening trade deficit posed a serious threat to economic growth and must be addressed urgently.

    READ MORE: KATI demands withdrawal of electricity, petrol price hike

    Mian Anjum Nisar said that the recent increase in fuel and electricity rates will add to the miseries of the businessmen, who are already feeling the heat of runaway inflation. He said that increase in fuel prices and tariff rates would also bring about another flood of inflation in Pakistan as it would increase the cost of doing business in the country.

  • Petrol to become more precious than gold

    Petrol to become more precious than gold

    People of Pakistan are in shock after back to back increase in petroleum prices up to 50.71 per cent by the government. The coalition government led by PML-N in a span of one week jacked up the prices of petroleum products first on May 26, 2022 and second on June 02, 2022. Petrol, which is the basic commodity for all the households, has been increased by Rs60 per liter to Rs209.86 from Rs149.86.

    READ MORE: High inflation leads to street crime

    The fluctuation in oil prices directly impact the rates of essential commodities. Considering the sharp rise in petrol price the people will witness a storm of price hike of all the essential and non-essential items in coming days.

    Besides, the rise in prices of gas and electricity also added the miseries to the people’s life. No one can image the quantum of inflationary pressure in coming days. But it is certain that it will play havoc.

    READ MORE: Prices of essential items rise by 20% on first POL rate jump

    The chairman of Pakistan Tehreek I Insaaf, Imran Khan, who was removed from the executive post of the prime minister on April 10, 2022 through a no-confidence motion, has lambasted the present government of squeezing people, who are already bearing the brunt of inflation.

    “The PDM government has increased burden on public by Rs.900 billion and price hike in all of the basic necessities. Furthermore increase in electricity price to Rs.8 has shocked all people,” former Prime Minister Imran Khan said in a Tweet.

    The former prime minister also said the inflation would reach to 75-year high after increasing by 30 per cent.

    The scribe talked to many people about the inflation, it is consensus that massive price hike was imminent and it would create chaos and would lead to street crimes in the country.

    The affordability issue will result in more poverty and people may start snatching even the eatables to feed their children. The rise in utility prices would also affect manufacturing and industrial activities. This will result in mass job cutting. This will also give a rise to street crimes.

    READ MORE: Pakistan hikes petroleum prices up to 50.71% in a week

    After the first rise in petroleum prices on May 26, 2026, the inflation based on Sensitive Price Indicator (SPI) recorded a significant rise by 20 percent Year on Year (YoY) by week ended June 02. 2022. The prices of essential items will further inflate as the impact of second oil price hike will pass on to the consumers.

    Fomrer Finance Minister Shaukat Tarin said: “I see inflation moving towards 25-30 per cent. PDM used to blame us for 12 per cent. They are crushing the poor people of this country. Should resign and call for fresh elections.”

    (By Syed Hamza Shahnawaz: The writer is a student of Lower Cambridge at St. Patrick’s High School, Karachi. He is regular contributor at PkRevenue.com)

  • Pakistan braces for worst food inflation: FPCCI

    Pakistan braces for worst food inflation: FPCCI

    KARACHI: Pakistan is heading towards the worst food inflation amid hike in tariff of electricity and increase in prices of petroleum products, the apex trade body said on Friday.

    READ MORE: FPCCI demands fixed tax regime for retailers

    Suleman Chawla, Acting President of Federation of Pakistan Chamber of Commerce and Industry (FPCCI), in a statement on Friday expressed the shock and awe of the entire business, industry and trade community at the unprecedented, one-tranche and massive electricity tariff hike of Rs. 7.91 / kWh; resulting in Rs. 24.82 / kWh base tariff for the year 2022 – 23, while it was Rs. 16.91 / kWh for the outgoing year 2021 – 22.

    It is a rate hike of a staggering 47 percent by NEPRA; and, it will jolt the cost of doing business and ease of doing business indices, he added.

    READ MORE: FPCCI demands CNIC condition withdrawal

    Suleman Chawla explained that the cumulative effect of the fuel and power rate increase my unleash a historical economic stagnation; and, will result in a lot of bankruptcies, inevitable defaults on account of electricity bills, many export orders would not be fulfilled, huge loss of employment opportunities and loss of tax revenue will follow.

    Acting FPCCI Chief added that inflation has already climbed to 13.8 percent, which is a 30-month high; and, with accounting for the latest developments, it is slated to cross 20 percent in a short span of 4 – 8 weeks.

    READ MORE: FBR urged to wave further tax on providing CNIC number

    Chawla apprised that the collective price spirals through combined multiplier effects of fuel and power prices will affect the masses the worst through food inflation; who will be further hit by impending unemployment. Hence, the government should come up with a protective mechanism for SMEs in consultation with the apex chamber; as SMEs are the real engines of growth and employment generation.

    Dissecting the main contributing factors in the power tariff hike, he enlisted rising fuel prices, capacity costs & challenges, transmission & dispatch (T&D) losses and rupee devaluation – which all can be dealt with better management and planning.

    READ MORE: Tax exemption sought for plant, machinery import

  • High inflation leads to street crime

    High inflation leads to street crime

    It is generally known that affordability issues in buying essential items lead to rise in street crime. Pakistan is witnessing massive surge in prices of essential items over the period of last few months with the rise in prices of commodities in both international and domestic markets.

    The new coalition government by PML-N in a span of one week increased the prices of petroleum products twice. The rise in both the announcements was phenomenal. The government increased the price of petrol, which is commonly used for all motor vehicles, especially motorcycles in large number.

    READ MORE: Prices of essential items rise by 20% on first POL rate jump

    The government firstly increased the prices of petroleum products by Rs30 per liter each on May 26, 2022. The second announcement came on June 02, 2022, which further increased the prices of POL products by Rs30 per liter on each product.

    Pakistan Bureau of Statistics (PBS) on Friday June 3, 2022, issued weekly data of Sensitive Price Indicator (SPI) for the week ended June 02, 2022. The SPI calculates difference in prices of essential items. The SPI shows a record increase in inflation by 2 per cent on weekly basis and 20.04 per cent on year on year (YoY) basis.

    READ MORE: Pakistan’s inflation sharply up by 13.4% in April 2022

    This inflation reflects only the increase in petroleum prices that were effective from May 27, 2022. The remaining impact on inflation after the second announcement of POL price increase will reflect on inflation data of next week ended June 09, 2022.

    The previous government maintained the petrol prices at huge subsidized rates to facilitate the citizens. As though the new government still kept the same subsidy on petrol till May 26, 2021.

    READ MORE: Pakistan hikes petroleum prices up to 50.71% in a week

    However, on account of pressure by the International Monetary Fund (IMF), the government has to forcibly increase petrol prices to persuade the IMF to release the next tranche of $1 billion.

    The current increase of petrol prices in the international market has left no option for the government to minimize the prices. Therefore, the government decided to increase petrol prices and keep the petroleum levy and sales tax at zero percent.

    The prices of petroleum products from June 03, 2022 shall be: Petrol at Rs209.86 per; High Speed Diesel at Rs204.15 per liter; kerosene oil at Rs181.94 per liter; and light diesel oil at Rs178.31 per liter.

    The people are not mentally prepared for this price hike and are displaying huge disappointment with the new government. The people are also opposing the new government because of making such a harsh decision.

    READ MORE: New petroleum prices in Pakistan from June 03, 2022

    The increase in the petrol prices simply indicates the increase in prices of all the basic and other commodities. It is because the hike in POL prices reflects the transportation prices. Thus results in price hike in the other commodities too.

    The citizens predict that in future there will be street crimes on a huge scale because of this inflation. The local citizens will always be unsafe while outside. The people also blame the new government for the increase in the POL prices as they do not have the potential to control the government.

    READ MORE: Petroleum prices in Pakistan from June 01, 2022

    (By Syed Faisal Shahnawaz: The writer is a student of Upper Cambridge at St. Patrick’s High School, Karachi. He is regular contributor at PkRevenue.com)

  • Prices of essential items rise by 20% on first POL rate jump

    Prices of essential items rise by 20% on first POL rate jump

    ISLAMABAD: The prices of essential items recorded an increase of 20 per cent owing to first jump in petroleum prices announced a week ago, official documents revealed on Friday.

    The inflation based on Sensitive Price Indicator (SPI) has increased by 20.04 per cent on year on year basis by week ended June 02, 2022, according to data released by Pakistan Bureau of Statistics (PBS).

    READ MORE: Pakistan’s headline inflation up by 13.8% in May 2022

    On week on week (WoW) basis the SPI recorded a two percent for the week ended June 02, 2022 over the previous week ended May 06, 2022.

    The SPI determines the price fluctuation in basic kitchen items on weekly basis. The Sensitive Price Indicator comprises 51 essential items collected from 50 markets in 17 cities.

    The latest surge in prices of essential items is the result of increase in prices of petroleum products that were announced on May 26, 2022 and effective from May 27, 2022.

    READ MORE: Pakistan’s inflation sharply up by 13.4% in April 2022

    The federal government on May 26, 2022 announced a sharp increase of Rs30 per cent liter each on all petroleum products.

    The price hike in essential items likely to rise alarmingly and may reflect in the SPI of next week ended June 9, 2022 as the government again increased the prices of petroleum products on June 02, 2022.

    According to the PBS, the SPI for the current week ended on June 02, 2022 recorded an increase of 2 per cent.

    READ MORE: Pakistan’s headline inflation increases by 12.7% in March

    Increase observed in the prices of food items Potatoes (9.08 per cent), Eggs (6.38 per cent), Vegetable Ghee 1 kg (4.59 per cent), Bread (2.72 per cent), Mustard Oil (2.65 per cent), Pulse Masoor (2.33 per cent), Cooking Oil 5 litre (2.18 per cent), Pulse Gram (1.99 per cent), Sugar (1.93 per cent), Cooked Beef & Pulse Mash (1.69 per cent) each, Vegetable Ghee 2.5 kg (1.51 per cent) and Bananas (1.35 per cent), non-food items Hi-Speed Diesel (20.69 per cent), Petrol Super(19.91 per cent) and Toilet Soap (1.40 per cent) with joint impact of (2.09 per cent) into the overall SPI for combined group of (2.00 per cent).

    On the other hand, decrease observed in the prices of Chicken (4.68 per cent ), Garlic (2.75 per cent), Wheat Flour (1.91 per cent), Tomatoes (1.26 per cent) and LPG (0.74 per cent).

    READ MORE: Food inflation rural increases by 14.6% in February 2022

    During the week, out of 51 items, prices of 28 (54.90 per cent) items increased, 05 (9.81 per cent) items decreased and 18 (35.29 per cent) items remained stable.

    The year on year trend depicts an increase of 20.04 per cent, Onions (177.62 per cent), Tomatoes (152.57 per cent), Mustard Oil (70.50 per cent), Vegetable Ghee 1 Kg (68.02 per cent), Garlic (67.44 per cent), Pulse Masoor (66.92 per cent), Petrol (64.78 per cent), Cooking Oil 5 litre (64.72 per cent), Vegetable Ghee 2.5 Kg (62.43 per cent), LPG (60.14 per cent), Diesel (56.45 per cent) and Washing Soap (42.92 per cent), while major decrease observed in the prices of Chillies Powdered (43.42 per cent), Pulse Moong (21.62 per cent), Electricity charges for Q1 (11.71 per cent), Sugar (11.16 per cent), Bananas (9.95 per cent), Potatoes (6.89 per cent) and Gur (1.46 per cent).

  • Tax reduced on POL products to ease inflation: PM Imran

    Tax reduced on POL products to ease inflation: PM Imran

    Prime Minister Imran Khan on Friday said the government has reduced taxes and duties on petroleum products to ease inflationary pressure.

    The Prime Minister Imran Khan said Pakistan has been put on right course with record exports, tax collection and remittances by the expatriates.

    READ MORE: Pakistan’s sensitive price inflation jumps up 18%

    Addressing a public gathering in Mandi Bahauddin, he said the inflation impacting the common man and the government is trying to ebb away its pressure by reducing taxes and duties on petrol import.

    Imran Khan said for the first time, the government also granted overseas Pakistanis voting right, enhanced farmers’ income, ensured the timely payments to sugarcane farmers.

    READ MORE: Pakistan’s inflation climbs up 24-month high in January

    The prime minister said the government is bringing about an IT revolution in the country as 70% rise in IT exports has been recorded. He also said the government was providing interest free loans to the youth and Rs 1 million health insurance to every family in Punjab.

    READ MORE: January headline inflation may clock near 13%

    Imran Khan said this is just the beginning and we have to make Pakistan a welfare state with Sehat Card being the biggest step towards it.

    He said by March, Sehat Card will be available across Punjab for which provincial government has allocated 400 billion rupees.

    READ MORE: Mini-budget likely to push up inflation: SBP

  • SPI inflation of essential items climbs up by 18.34%

    SPI inflation of essential items climbs up by 18.34%

    KARACHI: The inflation based on Sensitive Price Indicator (SPI) has increased by 18.34 per cent for the week ended November 18, 2021 over the same week a year ago, according to data issued by the Pakistan Bureau of Statistics (PBS) issued on Friday.

    The year on year trend depicts increase of 18.34 per cent, LPG (76.12 per cent), Electricity for Q1 (75.32 per cent), Vegetable Ghee 1 Kg (56.94 per cent), Cooking Oil 5 litre (56.28), Mustard Oil (55.42 per cent), Vegetable Ghee 2.5 Kg (52.94 per cent), Petrol (44.35 per cent), Diesel (40.21 per cent), Washing Soap (37.70 per cent) and Chilies Powdered (34.18 per cent).

    Major decrease in prices observed in Onions (38.61 per cent), Pulse Moong (28.80 per cent), Potatoes (26.55 per cent), Tomatoes (6.34 per cent) and Sugar (3.51 per cent).

    The SPI for the current week ended on November 18, 2021 recorded an increase of 1.07 per cent. Increase in the  prices of Chicken (8.26 per cent), Cooking Oil 5 litre (4.72 per cent), Bananas (4.18 per cent), Washing Soap (3.94 per cent), Vegetable Ghee 2.5 kg (3.15 per cent), Vegetable Ghee 1 kg (2.38 per cent), Rice Irri (1.76 per cent), Pulse Moong (1.62 per cent), Eggs (1.52 per cent), Fire Wood (1.24 per cent) and Tea Prepared (1.21 per cent), was observed with joint impact of (0.78 per cent) into the overall SPI for combined group of (1.07 per cent).

    On the other hand, decrease observed in the prices of Tomatoes (5.77 per cent), Sugar (4.25 per cent), Onions (2.14 per cent), Gur (1.48 per cent), Potatoes (1.36 per cent), Pulse Masoor (0.43 per cent), Garlic (0.13 per cent), Wheat Flour & LPG (0.08 per cent) each and Pulse Gram (0.02 per cent).

    During the week, out of 51 items, prices of 27 (52.94 per cent) items increased 10 (19.61 per cent) items decreased and 14 (27.45 per cent) items remained stable.

    Inflation of essential items rises by 17.37% YoY
  • Miftah Ismail highlights key reasons behind rupee fall

    Miftah Ismail highlights key reasons behind rupee fall

    Miftah Ismail, Former Federal Minister for Finance, has pointed out key reasons behind the massive depreciation in Pak Rupee (PKR) against the dollar.

    Ismail, who is also General Secretary of PML-N Sindh, in his Tweet on Sundh pointed out a thread on the four main reasons for the recent precipitous decline in the value of the rupee.

    A: Uncertainty about the renewal of the IMF program

    B: Largest trade deficit and fastest-growing imports in history

    C: Fourth highest inflation rates among major countries.

    D: Rapid increase in the money supply.

    Ismail explained that uncertainty about the renewal of the IMF program behind the rupee weakness.

    The former finance minister said: “Our program was ‘revived’ earlier this year and we were supposed to get a $1 billion tranche in July 2021. We are now in November and still, there isn’t an agreement. This is giving markets jitters.”

    In his opinion largest trade deficit and fastest-growing imports are the second major reason for the rupee fall.

    “We are on track for imports of $75 billion or over 24 per cent of the GDP. Both these are the highest in history. This year exports will cover only 37 per cent of imports, down from 44 per cent in 2018. We are moving in the wrong direction.”

    Our trade deficit in on track to be $47 billion or 15 per cent of the GDP. Again both numbers are highest in the history. Current account deficit will be around 5 per cent of the GDP. But for the healthy remittances due to decreased travel etc. we would have recorded the second-highest current account deficit

    The former finance minister said that in our history, after the one of 8.1 per cent in 2007/2008, the last year of Gen. Musharraf. The increased net demand of dollars from foreign trade is thus putting pressure on the Pak rupee. “Until we slow down imports or increase exports, the rupee will continue to be under pressure.”

    Another reason highlighted by the former finance minister is the highest inflation rates among major countries.

    A recent issue of The Economist showed that Pak has the fourth-highest inflation among major counties, two of whom we don’t even have much trade with. “We also have the highest inflation in South Asia.”

    Given that our inflation is more than our trading partners, our exports goods become more expensive and import goods become cheaper. This increases our real effective exchange rate and puts pressure on the rupee.

    Miftah Ismail continued that our money supply has grown from Rs 4.7 trillion to Rs 7 trillion, an increase of 49 per cent.

    Dr Hafeez Pasha estimates that a 1 per cent increase in money forces a 0.6 per cent rise in inflation. The primary cause of money supply increase is record-high government budget deficits.

    “There are other reasons for the continuous devaluation, political uncertainty for one, but these four —-interlinked as they are— I think are the major reasons.”

    Federal Minister for Energy Hammad Azhar in his tweet replied to Miftah Ismail saying: “I thought Miftah sahib was reminiscing about PML-N’s economy. Back then they managed to create such conditions without Covid shocks. The truth is that trade deficit now has risen due to price effect (same goods but more $ outflow due to high prices) rather than volume effect.”

    Dollar hits all-time high at Rs175.73 at interbank closing
  • Inflation is core issue in Pakistan: PM Imran

    Inflation is core issue in Pakistan: PM Imran

    ISLAMABAD: Prime Minister Imran Khan on Monday said that currently inflation is the core issue in Pakistan. The prime minister said that due to recent inflationary trend in international commodity market, inflation is the core issue in Pakistan currently.

    “We are working hard to ensure effective monitoring of prices of essential commodities through good governance and better price control mechanism.”

    Ensuring a proper control on supply chain, effective price enforcement and a strict check on hoarding are being made more effective for this purpose, he added.

    The prime minister directed the authorities concerned to take all necessary measures to provide maximum relief to common man by making the Market Committees at district and tehsil levels more effective.

    Earlier the Prime Minister was apprised that a successful pilot project was launched in Rawalpindi/Islamabad by PTIs Good Governance Team which resulted in substantial drop in prices of essential commodities by ensuring strict enforcement of Government notified rates.

    The prime minister was also informed that stay orders secured by the ineffective market committees need to be vacated at the earliest to reconstitute robust price monitoring mechanism at district and tehsil levels.

    The meeting was attended by Advisor on Finance Shaukat Fayyaz Tarin, Senator Saifullah Niazi and other officers concerned.

    Pakistan to emerge as food surplus country: PM Imran