Fuel price hike: Help the low-paid but what about industry in Oman?

Energy Wednesday 08/February/2017 22:38 PM
By: Times News Service
Fuel price hike: Help the low-paid but what about industry in Oman?

Muscat: Company bosses are calling for a freeze on diesel prices after the government ordered regular fuel prices to be fixed to help the low-paid.
Business leaders say they are watching their profits shrink as diesel prices climb. This month, diesel broke the 200 baisas mark for the first time in history.
Also read: Oman's Shura wants all fuel at fixed prices
Those running firms which form the backbone of Oman’s economy say the rising diesel prices should also be fixed to help those driving the economy forward.
The vice-chairman of the transport and logistics committee of Oman’s chamber of commerce agrees diesel prices should be frozen or other measures taken to help industry.
On Tuesday, Oman’s Council of Ministers ordered the cost of regular fuel be fixed at February prices - 186 baisas - until the government can implement a system to help those struggling with price increases.
Diesel and supergrade, however, are still open to monthly increases. Most heavy industry in the Sultanate uses diesel powered vehicles.
Mohammed Hassan Al Ansi, vice-chairman of the committee for logistics and transportation affairs at the OCCI, told Times of Oman: “Either they should fix the price for diesel, or regulate the industry heavily for overcharging and inflation.
“My fear with any rise in diesel price, even with the price now, is that people take advantage of the rise in price to overcharge for products and services.
“Of course it affects companies. It affects transport, and especially affects small businesses, in my opinion. It is a difficult situation for all.
“While these fuel prices might not change in a dramatic way, all of these institutions may react with heavy charges. It would affect businesses, and it would also affect consumers as well.
“I feel that there needs to be huge attention, regulation, and monitoring towards these charges, in order to protect both businesses and consumers from being taken advantage of, and losing more in the process.”
Anvwar Al Balushi, a major industrialist in Oman, said: “Industry is struggling due to the diesel price hike. If government can’t reduce it, they should freeze it. They should not leave it open.
“Listening to the common man, the government has frozen the regular petrol price. It will help the people to an extent, but when the price of other fuel types are not controlled, it is not going to help in controlling inflation,” the industrialist added.
Industrialist Sreedhar Tummala, general manager at Muscat Steel, said: “The diesel price increase is giving us a tough time.
“We are already paying 10 per cent extra for transport due to the increase in diesel prices. Paying extra means it’s a loss from our revenue as prices of our products cannot be increased all of a sudden.
“Not only for transportation, but also in different phases of production we are using fuel. Losses are happening in the sector,” he added.
His company produces 150,000 metric tonnes of steel annually with 1,000 to 1,200 trucks transporting cargo every month.
“This move will help the needy people, but we should not forget that the subsidy was removed to overcome the budget deficit,” said Loai B Bataineh, chief investment officer at Ubhar Capital.
“So, a freeze in the price of regular petrol is a welcome move, but the government should find a mechanism which can help the needy permanently,” he added.