KARACHI: The interim government of Anwaarul Haq Kakar has raised industrial gas tariff by an unprecedented 118 per cent since August 2023 from Rs1,100 to Rs2,400 per mmBtu.

An additional rise of 40pc in RLNG cost has taken the gas tariff to a whopping and historically highest level of Rs3,200 per mmBtu, indicating an overall hike of 191pc.

Karachi Chamber of Commerce and Industry (KCCI) President Iftikhar Ahmed Sheikh has said that as the industries have already been supply suspension for day days every week, the SSGCL has come up with another shock by disrupting supply on Friday and Saturday instead of the usual suspension on Saturday and Sunday.

SSGCL had closed gas supplies to the industries for 48 hours from Friday (8am) to Sunday (8am), citing short supplies of around 65 mmscfd from different gas fields last night. As a result, SSGCL’s line pack had severely depleted resulting in low gas pressures across franchise areas of Sindh and Balochistan. The company said it is still facing a short supply of around 20 mmscfd short from different gas fields.

“Is SSGC going to bear the cost incurred on overtime wages if we call our workers on Sunday for carrying out production?”, the KCCI chief asked.

He elaborated that since October 2020, the gas tariff, which stood at Rs819 per mmBtu, has constantly been raised and within a year, it has been increased to Rs2,400 per mmBtu whereas from January 2023, 40pc RLNG cost has also been added, taking industrial tariff to an unbearable Rs3,200 per mmBtu.

He said the Petroleum Division, which was in sheer disagreement with industries of Karachi at a stakeholders’ meeting held with the caretaker prime minister last month, has issued a notification to SSGCL to charge further up to 40pc for RLNG to industrial gas supply.

“It appears to be a clear-cut indication that someone intends to close all the industries in Karachi. The recurring exorbitant increases in the energy tariffs (gas and power) under IMF dictates and other costly industrial inputs due to mammoth rupee-dollar parity and deprivation of level playing field to compete globally have brought the industries to the verge of closure”, he warned.

The export-oriented industries in particular and import-substitute industries in general were confronting the greatest challenges which have never been witnessed in the history of Pakistan where the industrial and export productions have come to a standstill due to the unbearable cost of manufacturing, he added.

While claiming the closure of many industries in Karachi, he said not only gas but also the electricity price for the export sector has been increased by 115pc from Rs20 per KWh to Rs43.07 KWh and for general industries, electricity has been raised by 42pc from Rs30.39 per KWh to Rs43.07 KWh.

“Moreover, the hike in gas tariffs has also impacted the security deposits being submitted by industries to SSGC which have become unaffordable,” Iftikhar said.

Published in Dawn, January 13th, 2024