Govt Urged to Pass on Global Oil Price Relief to Consumers

By Dr. Ansab Ali

LAHORE: The Ferozepur Road Industrial Association (FRIA) has urged the government to pass on the benefits of declining international crude oil prices to consumers and businesses instead of maintaining domestic petrol and diesel prices while increasing the petroleum levy.

FRIA Acting Chairman Shafiq Butt said the latest decision has disappointed the industrial community, which had expected a reduction in petroleum prices in line with the downward trend in global oil markets.

He said international crude oil prices have eased in recent weeks, creating an opportunity to provide meaningful relief to transporters, industries, farmers and the general public. However, by keeping petrol and high-speed diesel prices unchanged while raising the petroleum levy, the government has denied consumers the benefits of lower global oil prices.

Shafiq Butt said fuel prices have a direct impact on production, transportation and distribution costs across all sectors of the economy. A reduction in petroleum prices, he said, lowers business costs, improves industrial competitiveness and helps ease inflationary pressures. Conversely, maintaining high fuel prices despite favourable international market conditions delays the expected reduction in the cost of doing business.

He noted that the decision comes at a time when manufacturers are already struggling with high energy costs, elevated financing rates, expensive raw materials and subdued domestic demand. Industries, he said, require every possible cost advantage to remain competitive in both domestic and export markets.

The FRIA acting chairman said lower fuel prices would particularly benefit small and medium-sized enterprises (SMEs), transport operators and the agriculture sector, where diesel is a major operating cost. Reduced transportation expenses would also help stabilise the prices of essential commodities and improve consumers’ purchasing power.

While acknowledging the government’s fiscal challenges and revenue needs, Shafiq Butt stressed that a balanced approach is necessary to protect economic activity. He said the petroleum levy is an important source of government revenue, but taxation policies should not undermine industrial growth, business confidence or consumer welfare.

He added that businesses have consistently advocated for predictable and market-based energy pricing policies that encourage investment and support economic expansion. When international oil prices decline, he said, domestic consumers should receive a fair share of the resulting benefits to strengthen confidence among investors and the business community.

Shafiq Butt further said lower fuel costs could provide timely support to exporters facing intense competition in international markets. Reduced logistics and transportation expenses would enhance the competitiveness of Pakistani products and contribute to higher export earnings.

He urged the government to review its petroleum pricing policy and ensure that future declines in international oil prices are reflected in domestic fuel prices. Such a policy, he said, would help curb inflation, reduce production costs and provide much-needed relief to industries, traders and consumers while supporting the broader objective of sustainable economic growth.