Industrialists denounce gas tariff hike

Term ECC decision unacceptable that will push down production, exports

KARACHI:

The Karachi Chamber of Commerce and Industry (KCCI) and all seven industrial town associations of the city have appealed to the prime minister to reject the Economic Coordination Committee (ECC)’s recent decision of a massive hike in gas tariff.

They dubbed the tariff increase unviable, unacceptable and unfeasible for all export-focused and general industries. In a joint statement, the KCCI, Site Association of Industry, Korangi Association of Trade and Industry, North Karachi Association of Trade and Industry and others stressed that more than 90% of export-oriented industries and general industrial units in Karachi would not be able to bear the mammoth increase in tariff, which would push down exports and local production to zero.

According to the ECC’s decision, the gas tariff for export-oriented industries has been raised by 86% to Rs2,050 per million British thermal units (mmBtu) while for general industries, it has been enhanced by 117% to Rs2,600 per mmBtu.

As if it was not enough, they said, 10% more would be added to the tariff as blended cost of re-gasified liquefied natural gas (RLNG). It would take the gas tariff for export-oriented industries to around Rs2,300 per mmBtu, rendering Pakistani goods uncompetitive in the international market.

It is pertinent to point out that the gas rates recommended by the Oil and Gas Regulatory Authority (Ogra) were much lower than those approved by the ECC.

The industrialists saw no possibility for the Karachi industries to carry on production activities at such exorbitant gas tariffs. They pressed policymakers to realise the gravity of the situation and avoid implementing the ECC’s decision so that industries and Pakistan’s economy could be saved from plunging into further crisis and reaching a point of no return.

Published in The Express Tribune, October 26^th, 2023.

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