Hike in diesel price: Essential goods to become costlier

KARACHI: The increase in diesel prices by three rupees a litre from Aug 1 is bound to make essential goods costlier due to increase in their transportation costs. The government had earlier raised the diesel price on July 1 by Rs2 per litre. The recent increase would make a cumulative impact of Rs5 in diesel price within five weeks. Manufactures of goods were already perturbed over the increase in general sales tax by one per cent on registered tax-payers and 2pc on non-registered persons in the budget 2013-2014. However, many companies are still working out the impact of GST hike on prices. Now they would have to pass on the diesel price hike to end-users after increase in transportation cost. Devaluation of the rupee against the dollar would further escalate food inflation, making imported raw material and finished goods costlier. One US Dollar was equal to Rs99.50 in the first week of June in inter-bank as compared to around Rs102 now. Karachi Retail Grocers Group’s General Secretary Farid Qureishi estimated five to 10pc jump in various goods’ prices in view of falling rupee value against the greenback, coupled with a two time price jump in diesel. All Karachi Tajir Itehad Chairman Atiq Mir anticipated five to 10pc jump in essential goods’ prices, which would push up cost of living. He said the PML-N government is now setting a new example of pushing up food inflation to the maximum limit instead of providing any relief to the people after taking votes from the masses. He added that the government is playing a havoc in the name of energy policy by making power and oil prices costlier. When diesel price was raised by Rs2 per litre on July 1, Karachi Wholesalers Grocers Association Chairman Anis Majeed had anticipated Rs1 to Rs1.50 per kg hike in wholesale prices of various commodities. Now he fears increase of at least Rs1.50 to Rs2 per kg in wholesale price of various commodities after Rs3 per litre raise in diesel price.” He said due to slowdown in buying, impact of diesel price hike of July 1, 2013, was not visible. He added that traders had imported commodities in good quantity due to decline in international prices. As the impact of diesel price jump was being absorbed due to thin buying, but the situation would change when trading would pick up in the market after clearing of old stocks. Korangi Associaton of Trade and Industry’s patron-in-chief, S M Muneer, Chairman, Mohammad Zubair Chhaya and President, All-Karachi Industrial Alliance, Mian Zahid Hussain expressed concern over increase in prices of electricity and said that approval of National Power Policy for the country is a good step from the government, but due to day-to-day increase in cost of production, it would become difficult for exporters to compete in foreign markets. S M Muneer said that positive results will be on the table with the promulgation of National Power Policy 2015 which would encompass generation of 400MW by Hydro and 7000MW from coal plant. But Pakistani exporters are facing difficulties due to high cost of production and increase in prices of electricity. He said that the government should take advice from all the stakeholders to find ways and means to complete export targets of the country and adopt step by step policy to increase prices as export orders are preplanned with foreign buyers and if prices of electricity and petroleum products would be increased, how can we expect completion of export orders in time. KATI Chairman Mohammed Zubair Chhaya said that Prime Minister Mian Nawaz Sharif should review the increase in petroleum prices on priority basis so that relief could be given to industry and people. Mian Zahid Hussain said that there would be negative effect due to increase of petroleum prices and due to this step, industrial and commercial activities would be hit badly. Due to increase in petroleum products, cost of living will also be increased and in present condition, purchasing power of people will be reduced.