New licensing rules threaten industrial raw material supply

November 19, 2024 (MLN): Saquib Fayyaz Magoon, Senior Vice President of FPCCI has highlighted that the licensing, storage, and transportation requirements introduced under the new clauses have created complications, raising concerns about a potential shortage of essential industrial raw materials.

He warned that this could negatively impact industrial production and exports, urging the withdrawal or suspension of Clauses B and C until a resolution is achieved. He described the amendments as counterproductive to the ease of doing business, particularly in industries like textiles.

Despite these challenges, Magoon expressed satisfaction with the Explosives Department's willingness to grant exemptions on a case-by-case basis, based on FPCCI’s recommendations. He noted that this flexibility would address some of the most pressing concerns.

Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), shared that Abdul Ali Khan, Director General of Explosives, recently visited the FPCCI Head Office.

During the visit, he met with representatives of chemical importers, traders, industrialists, and trade bodies to discuss ongoing concerns related to amendments in the Petroleum Act 1934 made on August 5, 2023.

These amendments introduced Clauses A, B, and C to categorize petrochemicals, leading to several anomalies and discrepancies in determining the applicable categories of chemicals.

Sheikh emphasized that the thousands of industrial chemicals used as raw materials do not necessarily require handling like inflammable petroleum products.

He further noted that compliance with these amendments poses significant challenges for small and medium enterprises (SMEs) due to their limited infrastructure and smaller operational scale.

Abdul Ali Khan, DG Explosives, acknowledged the concerns raised by chemical importers and industrialists.

He assured the participants that his department would facilitate solutions within its regulatory scope and emphasized that the department’s primary focus is on chemicals containing hydrocarbons.

The DG Explosives encouraged chemical traders to collectively raise their concerns under FPCCI’s umbrella, assuring them that his central and regional offices would accommodate genuine issues.

Additionally, he pledged support in obtaining necessary approvals or exemptions from other government offices, such as Deputy Commissioners and Customs, based on FPCCI’s recommendations.

He further suggested that FPCCI directly write to these offices for expedited resolution.

The meeting underscored the importance of continued collaboration between FPCCI, the Explosives Department, and relevant stakeholders to ensure the smooth functioning of industries reliant on petrochemicals.

Copyright Mettis Link News