Pakistan Industrial and Traders Associations Front rejects government plan of raising gas price

Lahore, March 16, 2018 (PPI-OT): Pakistan Industrial and Traders Associations Front (PIAF) has rejected the government plan of increasing gas prices by 5-7 per cent. PIAF Chairman Irfan Iqbal Sheikh in a joint statement along with senior vice chairman Tanveer Ahmed Sufi and Vice Chairman Khawaja Shazeb Akram stated that 7pc gas tariff hike will put the additional burden of around Rs.18 billion on the consumers, increasing cost of production of the industry. He said that instead of covering losses and enhancing the efficiencies the two gas utilities Sui Southern Gas Company Ltd (SSGCL) and Sui Northern Gas Pipeline Ltd (SNGPL) are shifting theirburden to the consumers.

The government pleas is that if the two companies were not given Rs.18b through gas tariff, they would turn negative and the government would have to inject funds from the budget to keep them floating. “Exporters and manufacturers are already greatly burdened and crushed due to rising tariff ofelectricity, gas, water and other essential raw materials leading to high cost ofdoing business inPakistan as compared to our competing countries” PIAF Chairman remarked.

Chairman PIAF called upon the government to take concrete measures and formulate effective policies to reduce the cost of doing business so as to jack up the country’s exports. He stated here that value-added industry was contributing its role in national exports in addition to providing jobs to millions of workers, but increased cost of doing business was hurting the industry, which must be curtailed to get maximum share for Pakistan economy. He suggested that government should merge all taxes, dutiesand contribution etc. and introduce one-window operation for onetime payment of all dues.

He highlighted that gas tariff per MMBTU in dollar terms in Bangladesh was $ 3.35; India $ 4.66 and Vietnam $ 6 but in Pakistan its US $7.59 (including Rs 200 GIDC-Gas Infrastructure Development Cess).He added that electricity tariff per kwh (kilowatt hour) in Bangladesh was $0.09; India $0.09 andVietnam $0.08, and in Pakistan its $ 0.11. Therefore he demanded that Gas Tariff for export industryshould be reduced at least by 10 percent less than of tariff of regional countries.

Irfan Sheikh emphasized that reduction in inputs was long-awaited demand of value-added industry to make Pakistani exports competitive in the international market because minimum wage in Pakistan was 111 percent higher than Bangladesh. He said that government must provide necessary incentives to the export sector in addition to introducing proactive export friendly policies.

For more information, contact:
Pakistan Industrial and Traders Associations Front (PIAF)
110/s Kot Lakhpat Industrial Estate, Lahore, Pakistan
Tel: +92-42-5123522
Fax: +92-42-5123522
Email: Info@piaf.pk