High Cost Of Oil Production

1. The lack of means of transport compels the producers to use the outdated & old means of transport. As a result of this, not only the time is wasted but the waste also increases which increases the cost.

2. Both industry & the generating power are complementary in nature. Pakistan explores oil to the extent of 10 to 15 percent only & remaining need is satisfied through imported oil at the high cost. The rising world prices of oil increase the cost in every sector of the economy.

3. The factory of the producing unit is set up in the manner that right from raw materials to the finished goods all must be produced within one unit. As the available working capital is reduced, the advantages of large scale production can’t be earned. Small scle of production increase the cost.

 

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