• Ask govt to take back unprecedented hike in gas tariffs
• Production suspension to cause $47m per day export loss
KARACHI: Industrialists in the economic nerve centre of Pakistan have announced a complete production shutdown on Monday (Dec 4) to force the caretaker government to reverse the unprecedented hikes in the gas tariffs.
They estimate a per day export loss of $47 million from the port city.
Businessmen have already displayed protest banners at the offices of all trade associations, demanding the government to immediately bring down the gas rates to Rs1,350 per mmBtu approved by the Oil and Gas Regulatory Authority (Ogra) instead of the high tariffs of Rs2,100-2,600 per mmBtu.
This was announced by various industrial bodies at the third press conference held at the Site Association of Industry (SAI) on Thursday, which was attended by the office-bearers of various industrial associations and value-added textile sectors.
Businessmen Group Vice-Chairman Jawed Bilwani said that based on the country’s total exports of $9.6 billion during the July-October period, the cumulative per day exports stand at $79m in which the share of Karachi is 60pc or $47m per day.
He claimed that all the trade bodies from Sindh and Balochistan are extremely perturbed over the exorbitant hike in gas tariffs which has made it impossible to keep the wheels of industries running.
Lasbela Chamber of Commerce and Industry from Balochistan along with Nooriabad and Kotri chambers have also joined our protest and assured to fully endorse all the strategies adopted by the Karachi Chamber of Commerce and Industry (KCCI) to deal with the situation, he said.
He said the business community appeals to the government to bring down the gas tariff to Rs1,350 per mmBtu which has been determined as 100pc cost of gas by Ogra and includes approximately 22pc profit of SSGCL as well.
“The industries are ready to pay gas at the rate of Rs1,350 per mmBtu but not the subsidies being provided to other sectors,” he said, adding that the business community would continue to raise a stronger voice via media until their legitimate demand to bring down gas tariff is fulfilled by the government.
The new gas tariff has burdened the industries with cross-subsidy for undeserving and unfair support to fertiliser, domestic and power sectors, he said.
Surprisingly, Mr Bilwani said, gas to fertiliser sector is being provided at a much lower rate, making no sense as this sector enjoys a profitability of around 20-22pc and it also receives a subsidy in gas tariff which was very strange and beyond anyone’s understanding.
SAI President Muhammad Kamran Arbi urged the government to hold a meeting with the industry stakeholders to reach a consensus on the gas price since the existing tariff has outgrown the manufacturing costs.
The business community 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 on incremental consumption during four winter months, the SAI chief said.
KCCI Senior Vice-President Altaf A. Ghaffar said that the industries of Karachi were already suffering from the high cost of manufacturing. Therefore, the government must immediately withdraw the hike in gas tariff to bring it down to an acceptable level.
SAI Chief Coordinator Saleem Parekh said that exports should continue without hindrance. The SMEs are closing down whereas the big industries may follow suit.
The country’s economy will see a hit from the halting exports, he warned, adding that the industry is unable to fetch higher prices for their products on the world markets due to costlier gas.
Published in Dawn, December 1st, 2023
