Manufacturers protest gas tariff hike

Published November 12, 2023
The industry fears expensive gas would make exports uncompetitive. Data released by the Pakistan Bureau of Statistics shows textile and clothing exports shrank 11pc year on year to $1.36bn in September.—AFP/file
The industry fears expensive gas would make exports uncompetitive. Data released by the Pakistan Bureau of Statistics shows textile and clothing exports shrank 11pc year on year to $1.36bn in September.—AFP/file

KARACHI: Fearing a large-scale industry shutdowns and subsequent layoffs, the Pakistan Hosiery Manufacturers Association (PHMA) has decided to launch a protest drive against the massive increase in the industrial gas tariff.

In an extraordinary general meeting (EOGM) held at PHMA House on Saturday, the association decided that besides demonstrations, no-export days would be observed frequently till the government seriously accords attention to the Karachi-based industries and takes their representatives on board to revisit the gas tariff hike decision and introduce fair industrial tariff.

PHMA Patron-in-Chief Mohammad Jawed Bilwani said other textile-related exporters and town associations, linked with the Sui Southern Gas Company Ltd’s (SSGCL) network, would also hold their extraordinary general meetings shortly so that a united stand could be taken on deciding dates of joint protests and other activities.

He apprised the PHMA members that he had taken up the matter with the high-ups in the government. Various meetings were held in Islamabad and Karachi with the federal energy and finance ministers and the concerns of the SSGC-linked export-oriented industries were also communicated to the caretaker prime minister.

He said the Oil and Gas Regulatory Authority (Ogra) determined the industrial gas tariff Rs1,350 mmBtu but the energy ministry has unilaterally further increased the tariff by 100-130pc on which industries cannot operate.

The export industries have demanded a fair industrial gas tariff of Rs1,350 per mmBtu, failing which a huge number of export industries will be closed. The industries of Karachi have rejected the exorbitant increase in gas tariff due to burdening of cross-subsidies given to fertilisers and the domestic sector, which they principally do not deserve.

Mr Bilwani said the industries have never received any subsidy from the government for gas tariffs and were rather burdened with cross-subsidies.

The high gas tariff has made the export-oriented industries unviable and uncompetitive in international markets at a time when the country direly needs foreign exchange to control the swelling trade and current account deficits.

The government’s decision would shatter the exports, leading to huge closure of industries, layoffs creating huge retrenchment of labour which might cause increase in street crimes and can also lead to bankruptcies of manufacturing units, he feared.

Exporters who attended the meeting said that the PHMA and the Karachi Chamber of Commerce and Industry must again strongly take up the matter with all concerned in the caretaker government as the export-oriented industries and indirect exporters are not in a position to bear and absorb this exorbitant increase in industrial gas tariff.

They said most of the small and medium enterprises cannot afford to opt for alternate fuels owing to a lack of space as the majority of them are vertical units. They lamented that the SSGCL is also demanding an additional 50 per cent tariff hike to supply gas in four months of winter without any assurance whether it would be in a position to supply uninterrupted gas supply with the required pressure.

Also, there would be two weekly gas holidays. In such a scenario, the industries cannot operate, they added.

Published in Dawn, November 12th, 2023

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