Industries demand fair gas price

KARACHI: - Industrialists in Karachi on Tuesday demanded the government to lower the gas tariff to Rs1,350 per million British thermal units (MMBtu), which they said was the actual cost of gas as determined by the regulator.

The Karachi Chamber of Commerce and Industry (KCCI), along with representatives of seven industrial town associations and value-added textile sectors, said at a press conference that the recent sharp increase in gas tariffs was a "shortsighted" move that would hurt the economy and exports.

"We are ready to pay the cost of gas but not the subsidies for other sectors," said Jawed Bilwani, vice chairman of the Businessmen Group (BMG).

He said the new gas tariff, which ranged from Rs2,100 to Rs2,600 per MMBtu, was imposed to subsidise the fertilizer, domestic and power sectors, while penalising the industrial sector, which contributes to 27 percent of the country's gross domestic product (GDP) and 70 percent of its exports.

“The industry demands fair gas tariff of Rs1350 per MMBtu but would never accept the unbearable and unabsorbable gas tariffs ranging from Rs2100 to Rs2600 per MMBtu which have been imposed to please the fertilizer, domestic and fertilizer sectors and terribly penalize the industrial sector of the country."

Bilwani warned that if the government did not reduce the gas tariff to Rs1,350 per MMBtu by the first week of December, the business community would intensify its protests by displaying banners across the city and observing no-export days twice or thrice a week.

“We will only wait till 1st week of December for the government to announce reduction in gas tariff but if it does not happen, we will have no choice but to intensify protests.”

He also said that the government had not fulfilled its promise of providing electricity at a reduced tariff of Rs20 per unit for incremental consumption during the winter season, which would have helped the industries cope with the gas shortage.

Iftikhar Ahmed Sheikh, president of KCCI, said that the government should focus on increasing the gas supply rather than re-prioritizing it among different consumers and raising the tariffs to an "unbearable" level.

"The government has to understand that 100 percent to 130 percent increase in industrial and captive gas tariff will be highly detrimental for the economy as it would lead to closure of industries, trigger lay-offs and huge retrenchment of labor force which might result in serious law and order situation, steep rise in street crimes and bankruptcy of manufacturing units," Sheikh said.

“The unwise move to raise gas tariff will badly hit the value-added exports and the industrialists will have no other choice but to revert back to exporting the raw materials which would, subsequently, provide a perfect opportunity to competitors to easily take over Pakistan’s exports share.”