Fuel Price Hikes Put Industrial Survival At Risk, Warn SITE Industrialists.
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Industrialists within Karachi’s largest manufacturing hub, the SITE Industrial Area, have issued an urgent warning that recent sharp escalations in petroleum prices threaten the operational survival of Pakistan's industrial sector. Commenting on the latest hikes—which saw diesel and petrol prices increase by Rs3.72 and Rs12.90 respectively—SITE Association of Industry (SAI) President Abdul Rehman Fudda questioned whether government policies aim to preserve employment or inadvertently drive factories toward permanent closure. Industrial leaders emphasized that compounding pressures from exorbitant energy tariffs, heavy taxation, and severe regional competitive disadvantages make it increasingly impossible for local manufacturers to sustain operations, fulfill export commitments, or accurately calculate production costs under the current daily fuel-pricing mechanism.The SAI has strongly urged the federal government to immediately abandon daily petroleum price revisions in favor of a stable 15-day pricing cycle, arguing that predictability is essential for businesses entering into long-term commercial contracts.
Industrialists in Karachi’s largest SITE industrial area have expressed serious concern over another sharp increase in petroleum prices, warning that continued increases in production costs, expensive energy and heavy taxation could push industries towards closure, undermine exports and trigger a fresh wave of unemployment.
SITE Association of Industry President Abdul Rehman Fudda questioned whether the government wanted industries to remain operational and employment opportunities to be preserved, or whether industrialists were being left with no option but to shut their plants and sit at home.
He urged the government to abandon the policy of revising petroleum prices on a daily basis and introduce a 15-day pricing cycle, saying greater stability in fuel prices was essential for industrialists, exporters and businesses to accurately assess production costs and enter into commercial agreements.
Mr. Fudda said representatives of the public, business and industrial sectors had repeatedly urged the government to reduce petroleum prices and reconsider the daily pricing mechanism. However, diesel and petrol prices had once again been increased by Rs3.72 and Rs12.90, respectively, placing an additional burden on businesses and industry.
He said the repeated increases were particularly damaging at a time when the government was claiming to be working towards boosting exports, attracting investment and improving the ease of doing business.
“On the one hand, committees are being formed and commitments are being made to increase exports and facilitate businesses; on the other, policies are being pursued that are making it increasingly difficult for industries to remain operational,” he said.
The SAI chief said Pakistani manufacturers and exporters were already under severe competitive pressure because of high production costs compared with regional competitors. Frequent changes in petroleum prices were making it increasingly difficult for businesses to calculate production costs, quote prices and enter into new commercial contracts.
He said small and medium-sized enterprises (SMEs), already struggling with difficult operating conditions, were being pushed further into distress, while large-scale manufacturing units were also facing growing challenges to their survival.
Abdul Rehman Fudda warned that a decline in industrial activity would have a direct impact on employment. Shrinking job opportunities, particularly for young people, could aggravate social problems and contribute to rising crime and insecurity.
He pointed out that industries were already grappling with high electricity and gas costs, inadequate water availability, law-and-order concerns and heavy taxation. In such an environment, he said, announcements aimed at attracting new and foreign investors would have limited impact unless existing industries were first stabilized and made competitive.
According to SAI chief, ensuring the uninterrupted operation of existing industries should be the government’s immediate priority, as a functioning industrial base was essential for generating employment, increasing exports, supporting economic growth and creating an environment conducive to foreign investment.
“If existing industries are forced to close, efforts to attract new investment and increase exports will lose their effectiveness,” he said, urging the government to take immediate measures to contain industrial costs and provide a stable policy environment.
