The government has threatened to take “strict action” against auto dealers across the country if they do not reduce the prices of imported cars following the removal of regulatory duty earlier this year.
The announcement came on Saturday after the government lifted a number of restrictions on imports. Earlier, there was an unannounced ban on car imports in an effort to conserve foreign exchange reserves. These restrictions included limiting the issuance of letters of credit (LCs) and restricting the import of luxury goods.
The automobile sector was one of the hardest hit by these restrictions, as many auto dealers were forced to scale back production or even close their doors altogether. As a result, the prices of imported cars soared.
The government has now said that it will take action against any auto dealers who do not reduce their prices to reflect the removal of regulatory duty. The commerce minister, Syed Naveed Qamar, has warned that dealers who fail to comply with the government’s orders could face “strict action,” which could include fines, imprisonment, or the revocation of their licenses.
Qamar also said that the government is expecting to reach a staff-level agreement with the International Monetary Fund (IMF) soon. This agreement would pave the way for the resumption of a $7 billion loan facility, which would help to boost the country’s foreign exchange reserves.
Qamar said that once the IMF agreement is in place, the government will lift the restrictions on the issuance of LCs. This would allow auto dealers to import the raw materials they need to produce cars, which would help to bring down the prices of cars.
The government’s announcement is a welcome development for consumers who have been struggling to afford imported cars. However, it remains to be seen whether the government will be able to enforce its orders. Auto dealers have a history of resisting government attempts to regulate their prices, and it is possible that they will do so again in this case.