KARACHI: The city’s industrialists on Tuesday warned the caretaker government of intensifying protests from the second week of December if it doesn’t reduce gas prices.

“If the government fails to pay attention to the business community’s demand, we will display protest banners all over the city and observe no-export day twice and even thrice a week,” Businessmen Group Vice Chairman Jawed Bilwani told reporters at a press conference along with Karachi Chamber of Commerce and Industry (KCCI) President Iftikhar Ahmed Sheikh and representatives of all seven industrial associations and the value-added textile sector.

Mr Bilwani said a series of press conferences in all industrial zones displaying protest banners at the offices of trade associations would be held, besides no-export days once a week.

The business community, he added, still awaits the promised winter package for incremental consumption of electricity wherein it was agreed to provide electricity at a reduced tariff of Rs20 per unit.

Asks government to bring down gas tariff to Rs1,350 per mmBtu

He said the new gas tariff has burdened the industries with a cross-subsidy for undeserving and unfair support to fertiliser, domestic and power sectors. “The industry demands fair gas tariff of Rs1,350 per mmBtu but will never accept the unbearable and unabsorbable gas tariffs ranging from Rs2,100-2,600 per mmBtu which have been imposed to please the fertiliser, domestic and power sectors and penalise the industrial sector of the country,” he added.

He also pointed out that the gas tariff for fertiliser units in the neighbouring country was $6.5 per mmBtu whereas in Pakistan this particular sector was being provided gas at a much lower rate which enjoys a profitability of around Rs40 billion and it also receives subsidy in gas tariff.

Fertiliser being produced in Pakistan through subsidised gas was being smuggled which is tantamount to smuggling gas, he added.

He claimed that 95pc of the subsidy on re-gasified liquefied natural gas (RLNG) was consumed in the Sui Northern Gas Pipeline Ltd (SNGPL) where RLNG consumption was between 800-1000 mmcfd while in Sui Southern Gas Company’s (SSGC) territory, only 50 mmcfd was being consumed but the SSGC-linked industries were burdened with cross-subsidy to benefit other sectors.

“Nowhere in the world, export/import substitute industries are burdened with cross-subsidy to benefit other sectors but they are, rather, facilitated to lower their cost so that they could compete globally to enhance exports,” Bilwani said.

He appealed to the government to bring down the gas tariff to Rs1,350 per mmBtu which has been determined as 100pc cost of gas by the Oil and Gas Regulatory Authority and the industries were ready to pay the same but not the subsidies.

KCCI President Iftikhar Ahmed Sheikh said the unwise move to raise the gas tariff would badly hit the value-added exports and the industrialists would have no other choice but to revert to exporting the raw materials which would, subsequently, provide a perfect opportunity for competitors to easily take over Pakistan’s exports share.

Published in Dawn, November 22nd, 2023