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KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh has urged the caretaker government to reduce the petroleum prices by Rs18-20 per litre as a result of the declining trend in world oil prices despite ongoing conflict and supply cuts announced by Saudi Arabia and Russia till December.
“I can project that these major producers of oil will continue their cuts beyond December 2023,” he said in a statement.
International oil prices are now down to $81.30 per barrel, which is below the 50-day moving average of $85.70, thus indicating a bearish global oil demand outlook.
As per the latest statistics, demand from both the US and China is down followed by a rise in US reserves by 11.9 million barrels.
Mr Sheikh explained that this phenomenon categorically establishes the fact that the global economy is on a downslide cumulatively as the conflict between Russia and Ukraine and the Israeli war on Gaza are the principal factors in the development of this bleak economic scenario for the world.
In the immediate term, petroleum prices are the only safe bet for the government to tame inflationary pressures in light of the ongoing IMF-SBA review as the fund will now allow the most logical downward revision of key policy rate by the State Bank of Pakistan to 20pc from 22pc given the core inflation at 18.50pc during November.
The FPCCI chief said prices of food and petroleum have nothing to do with the policy rate and it should be based on core inflation.
He proposed that an essential commodities price-oversight mechanism should be put in place in consultation and participation of the private sector to better manage the prices of key commodities which are showing a persistent downward trend globally.