ISLAMABAD: The Friends of Economic and Business Reforms (FEBR) on Sunday welcomed the newly-elected Prime Minister Shehbaz Sharif’s decision of keeping oil prices unchanged for the rest of the month by rejecting the Oil and Gas Regulatory Authority’s proposal to raise the rates of oil products.

FEBR President and LCCI former vice president Kashif Anwar observed that it was the first test for the new government to provide relief to the industry despite high oil rates in the global market. Few days after the exit of the previous government, the Oil and Gas Regulatory Authority had suggested an unprecedented increase of 83 percent in the prices of petroleum products with effect from April 16 to recover full imported cost, exchange rate loss and maximum tax rates.

But the new government remains successful in this test, providing another huge amount in subsidy from Apr 16 to 30 with a view to lower cost of production which is imperative for constant economic growth of Pakistan. He said that the stable petroleum prices will not only provide the much-needed respite to the masses but also reduce the cost of production and give a boost to economic activity.

It is fact that the government was facing problems due to the former government’s mismanagement as they had set the price of petrol at Rs149, which burdened the national exchequer.

Kashif Anwar said that Pakistan was generating a major share of electricity through furnace oil and increase in POL prices makes the cost of manufacturing activities unviable for the private sector.

He said that an increase in diesel price also further enhances transportation cost and create additional problems for the agriculture sector as most of the tube wells were running on diesel.

He also demanded the immediate reduction in electricity tariff especially for SMEs as a first step towards cut in production cost while the second and vital step toward this direction would be bringing discount rate to the regional level with a view to provide level-playing field especially to the export industry.

The decision would have the same importance for the domestic industry too, as it has also been facing tough competition of cheaper imported merchandize in the country following FTAs with several countries, he added.

The FEBR chief said that after the Corona devastation, Pakistan should take advantage of those export orders canceled by the other regional countries. For this, the authorities would have to reduce production cost of the industries to avail this offer by the international buyers.

He said that the central bank should announce an initiative related to loans for small and medium enterprises (SMEs), as the SME sector has to show collateral to banks, which are always reluctant to offer them concessional credit.