Business Community Urges Government to Pass on Full Benefit of Global Oil Price Decline

By Muhammad Shahzad | Lahore, Pakistan
LAHORE: The Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) Businessmen Panel (BMP) has urged the federal government to fully transfer the benefit of falling international crude oil prices to consumers, traders, and industries instead of maintaining a heavy tax burden on petroleum products.
BMP Chairman and former FPCCI President Mian Anjum Nisar said that lower fuel prices are the quickest and most effective way to reduce production costs, curb inflation, and stimulate economic growth.
He noted that international crude oil prices have largely returned to pre-Middle East conflict levels, yet Pakistani consumers and businesses have not received comparable relief. Despite the decline in global prices, the government recently reduced petrol and diesel prices by only Rs1.97 per litre, while continuing to retain a significant share of the benefit through petroleum levies.
According to Mian Anjum Nisar, official figures indicate that nearly 29 percent of the retail price of petrol and diesel still consists of taxes and levies. Petrol currently carries around Rs88 per litre in taxes, while diesel bears more than Rs91 per litre, increasing transportation costs, industrial expenses, and inflation across the economy.
He acknowledged the government’s introduction of a Climate Support Levy under its fiscal reform agenda but stressed that environmental initiatives should not come at the expense of industrial competitiveness, economic growth, and consumers’ purchasing power. He called for a gradual reduction in all petroleum-related taxes and levies as international oil prices continue to decline.
The BMP Chairman observed that domestic fuel prices rise almost immediately whenever global crude prices increase, but when international prices fall, consumers receive only limited relief because much of the benefit is absorbed through taxes. He said this pricing policy deprives the economy of lower energy costs and weakens business confidence.
Mian Anjum Nisar highlighted that Pakistan’s industrial sector is already struggling with expensive electricity, high financing costs, rising raw material prices, and declining export competitiveness. Lower fuel prices, he said, would reduce manufacturing, agriculture, transport, and logistics costs, benefiting exporters, manufacturers, traders, and consumers alike.
He further stated that Pakistan’s exporters face intense competition from regional economies with lower energy and logistics costs. Passing on the full benefit of declining global oil prices, he argued, would reduce the cost of doing business, encourage investment, create employment, and strengthen exports.
He added that lower petroleum prices would also reduce freight and transportation costs, lower farming expenses for tractors, tube wells, and harvesting machinery, and help stabilize the prices of essential commodities, providing much-needed relief to inflation-hit consumers.
While recognizing the government’s fiscal challenges, Mian Anjum Nisar emphasized that economic policy should balance revenue generation with sustainable growth. He warned that excessive reliance on petroleum taxes may boost short-term revenues but increases production costs, discourages investment, and weakens industrial competitiveness.
Calling for a transparent and market-based petroleum pricing mechanism, he urged the government to ensure that reductions in international crude oil prices are automatically and promptly reflected in domestic fuel prices. He expressed confidence that such a policy would boost industrial production, strengthen small and medium enterprises, improve export competitiveness, and contribute to sustainable and inclusive economic growth in Pakistan.