Industry asks govt to take back gas price rise

Fears cost of doing business and inflation will swell

KARACHI: Newly elected Karachi Chamber of Commerce and Industry (KCCI) President Junaid Makda has rejected the decision to raise gas prices and has requested the government to immediately withdraw the exorbitant hike.

"It will substantially raise the cost of doing business and prove detrimental for the CNG sector and general industries," he lamented. "The increase in gas tariffs will ultimately foster inflation, which will terribly affect lives of the poor masses."

Makda pointed out that the CNG industry had been under constant threat due to unstable policies, particularly the policy to carry out intense gas load-shedding and raise gas prices by 40%, which would result in a complete halt to the transport sector.

"CNG stations in Sindh are already facing a three-day closure on a weekly basis and the tariff of Rs700 per unit, which was the highest tariff compared to all other sectors, has been enhanced further to Rs980 per unit," he said.



"This will result in a hike in the CNG sale price in Sindh from Rs82 per kg to around Rs102 against the existing petrol price of Rs93 per litre."

According to the petroleum policy, a difference of 30-35% has to be maintained between petrol and CNG prices but it has been set aside and not considered, he added.

He said the price hike would lead to complete collapse and closure of the CNG industry, adding it would also raise the import bill of petrol by $1.2 billion.

However, Standard Capital Securities Chief Strategic Officer Faisal Shaji said Pakistan had been wasting indigenous gas and the decision had to be taken in the larger economic perspective.

"This bitter pill has to be swallowed and the previous government should have taken this decision at better times," he said while talking to The Express Tribune. "They did the wrong thing by not acting at the right time."

Shaji, however, said the government's decision to increase gas prices had little to do with bad performance of the Pakistan Stock Exchange as there had been other reasons behind it.

He added that some sectors like glass and capital goods manufacturers would see their profitability erode to some extent.

Published in The Express Tribune, October 6^th, 2018.

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