Staff Report
ISLAMABAD: President Pakistan Economy Watch (PEW) Dr. Murtaza Mughal on Sunday said rising oil prices in the international market can wipe at least one percent of Pakistan’s GDP.
In a statement issued here, he said preparations are being made to impose new taxes of Rs500 billion on the people in the upcoming budget which will make life more difficult for the masses.
Dr. Murtaza Mughal said that the national economy cannot withstand the wrath of western powers and international institutions, therefore caution should be observed amid the Ukraine crisis. He said that rising oil prices in the international market are affecting all oil-importing countries, while expensive oil will eat away at least one percent of Pakistan’s GDP. The oil prices can jump as tensions rise, which will be a nightmare for all the oil-importing countries who will see their budgets disrupted, he said.
The President PEW said that Pakistan satisfies most of its oil needs through imports and its price could be hit by a widening trade deficit, weakening rupee and higher inflation.
Pakistan’s economy is already slow, and now it faces fresh risks while the government has little option to provide cushion through tax cuts and the situation is highly volatile in the international market, he observed.
Dr. Mughal noted that the energy security of all the oil importing countries is challenged by political conflicts that interfere with the global supply system. In case of escalation, the oil supply of energy importing countries would be disastrously disturbed and a struggle for oil import sources will be straining their relations and causing intense international competition, he said.
