Gas tariff hike sparks outrage among industries

November 06, 2023 (MLN): The industrial sector in Karachi has expressed its strong opposition to the recent increase in gas tariff by the government, which they claim will make their businesses unviable and uncompetitive in the international market.

The gas tariff for industrial and captive consumers has been raised by 100% to 130%, which is the highest and unprecedented in the history of Pakistan.

The industry leaders have accused the government of being unfair and unconstitutional in imposing the gas tariff hike, which they say will lead to industrial closures, layoffs, retrenchment of labor, and loss of export share.

They have also alleged that the government is not well informed that the industry has never received any subsidy on gas, but rather has been burdened by the cross-subsidies given to the domestic and feedstock/fertilizer sectors.

The industry has also expressed its perception that Karachi, the industrial hub and 54% contributor to national exports, is being victimized by design to sabotage its industry.

They have warned the government that this is a big adventure that could have serious consequences for the economy.

They have appealed to the government to reconsider its decision and save the industry and export of Pakistan from complete collapse.

Industry's Demands

The industry has demanded that it should be declared as the first priority for the supply of gas.

They are ready to pay the entire 100% cost of gas, just as their competitors do, but they are not willing to pay the cross-subsidies.

They have also urged the government to curtail the domestic sector supplies and gradually shift them to other sources of energy for heating purposes.

Furthermore, the industry has insisted that its tariff should remain at Rs1,350 MMTBU, as determined by OGRA, representing the full 100% cost of gas.

If the government wishes to provide subsidies to any sector, it should allocate the necessary funds in the budget, and even the IMF would not object to supporting the underprivileged in this manner.

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