May 06, 2008	Tuesday	Rabi-us-Sani 29, 1429

LAHORE, May 5: The Lahore Chamber of Commerce and Industry and All Pakistan Textile Mills Association (Aptma) have cautioned the Oil and Gas Regulatory Authority of the serious repercussions on industry by the proposed 35 per cent increase in gas tariff.

LCCI president Mohammad Ali Mian and Aptma zonal chairman Akbar Sheikh said during a discussion on the proposal here on Monday that 35 per cent increase in gas tariff proposed by Sui Northern Gas Pipelines Limited (SNGPL) would have devastating effects on the national economy and it would get the export-oriented industry thrown out of the international market.

They said that the textile was one of the most value-added and export oriented sectors in Pakistan accounting for more than 65 per cent exports.

Gas has assumed the status of basic raw material for as many as 450 textile processing units engaged in dyeing, finishing, and printing of fabrics. It accounted for 25 to 30 per cent of their cost of production. Even the slightest increase on this account would oust them from the export market depriving the country of billions of dollars.

They said that the rising interest rates and wage increases had already added to the operational cost. Any further increase in input cost would squeeze the margin of the industry and make it unviable.

They said that the domestic sector and the fertiliser sector were being subsidised by the industry to the tune of Rs30 billion. If further subsidy was required it should be provided by the government and not by the industry.

Similarly, the gas development surcharge being paid by the industry should be used for providing relief to the textile units by avoiding increase in tariff instead of being treated as revenue.

They said that the industry in Punjab was being specially hit due to payment of Rs10 billion as the price equalisation surcharge by the SNGPL to Sui Southern Gas Company Limited. In case of tariff equalisation, load-shedding should also be equalised across the country.

They said that the contention of the gas companies, that their prices were lower than several other countries, was untenable because the figures quoted by them were not co-related with the cost of living index.