KCCI appeals govt to reduce gas tariff

Urges ministries to look into declining exports, especially in textile sector

KARACHI: Karachi Chamber of Commerce and Industry (KCCI) President Younus Muhammad Bashir has appealed the government to withdraw the Gas Infrastructure Development Cess (GIDC) from the date it was implemented, along with the recently implemented 23% increase in gas tariff in order to save Pakistan’s exports from further decline.

In a statement issued on Wednesday, the KCCI chief said that if appropriate steps were not taken, exports would further decline, particularly in the value-added sector.

He was of the view that the industries in Sindh were being penalised in terms of tariffs, while the industries in the north have been receiving gas at a much lower price since the arrival of Re-gasified Liquid Natural Gas (RLNG).

“Karachi’s business and industrial communities have been lamenting the decline of exports, not because of poor quality, but due to high manufacturing costs compared to neighbouring countries,” the statement quoted Bashir as saying. Referring to a recent announcement by India’s Ministry of Petroleum and Natural Gas, Bashir said it will increase competition in the region, while causing a further decline in Pakistan’s exports.

Indian gas tariff rate was already 8% lower compared to Pakistan and it has been reduced further by 20%, bringing tariffs down to around Indian Rs321per mmbtu. Whereas in Pakistan, the gas tariff stands at Rs488 plus GIDC of Rs100 and 23% increase in tariff, taking it to Rs700 per mmbtu.

“It is needless to mention that other challenging aspects remain unresolved including zero rating of export oriented sectors, resolution of pending sales tax refunds, customs rebates and other pressing problems which have already enhanced our cost of manufacturing,” Bashir added.

Published in The Express Tribune, April 7^th,  2016.

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