SITE industrialists warn that rising petroleum prices could cripple Pakistan’s manufacturing sector
Leaders of Karachi’s largest industrial hub say daily hikes in diesel and petrol are inflating production costs, threatening plant closures, exports and jobs.
Share
Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Rising fuel costs hurt Manufacturing, Cement, Steel and Textile sectors – Don't buy.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- CementNegatively affected
- SteelNegatively affected
- TextileNegatively affected
- AutomobileNegatively affected
- PowerNegatively affected
Companies
Mentions in This Briefing
Sectors: Cement, Steel, Textile, Automobile, Power — Negative · Do not buy. PSX tickers: OGDC, PPL, MARI, PSO, SNGP, ATRL. Rising fuel costs hurt Manufacturing, Cement, Steel and Textile sectors – Don't buy.
Full Story
Open on Business Recorder## Concern voiced by SITE Association of Industry
The president of the SITE Association of Industry (SAI), Abdul Rehman Fudda, told reporters that the recent increase in petroleum prices – diesel up by Rs 3.72 per litre and petrol by Rs 12.90 per litre – is pushing manufacturers toward shutdown, eroding export competitiveness and risking a surge in unemployment.
## Call for pricing stability
Fudda urged the government to abandon the practice of revising fuel prices every day and to adopt a 15‑day pricing cycle. He argued that price stability is essential for industrialists, exporters and other businesses to calculate production costs accurately and to enter into commercial contracts.
## Impact on existing manufacturers
According to the SAI chief, small and medium‑sized enterprises are already under severe strain from high electricity, gas and water costs, heavy taxation and law‑and‑order issues. Frequent fuel‑price changes add another layer of uncertainty, making it difficult for firms to quote prices, win export orders and maintain profitability. Large‑scale manufacturers face similar pressures, which could lead to reduced output and job losses.
## Wider economic implications
Fudda warned that a slowdown in industrial activity would directly affect employment, especially for young workers, and could exacerbate social problems such as crime and insecurity. He stressed that stabilising the existing industrial base must be the government’s priority before any new investment‑attraction initiatives can succeed.
## Government’s contradictory policies
The industrial leader highlighted a paradox: while committees are being formed to boost exports and ease business, policies that continuously raise fuel prices are undermining those very objectives. He called for immediate measures to contain industrial costs and create a predictable policy environment.
## Outlook
If fuel prices continue to rise without a stable pricing mechanism, the manufacturing sector – a key driver of Pakistan’s GDP, exports and employment – could see a sharp contraction, with knock‑on effects for related sectors such as cement, steel and textiles.