Trader bodies on Saturday urged the federal government to reconsider its decision to hike the gas tariff to address concerns of the business community.
Islamabad Chamber of Commerce and Industry (ICCI) President Ahsan Zafar Bakhtawari and President of Karachi Chamber of Commerce and Industry (KCCI) Iftikhar Ahmed Sheikh, made the demand during a meeting held here, according to a news release. They expressed concerns over the federal cabinet’s approval of a 67% increase in gas tariffs as it would increase production costs, reduce industrial activities, and badly hurt exports.
During a meeting, they urged the government to take solid measures and ensure competitive energy tariffs for the industry to boost industrialisation and exports.
President ICCI highlighted that Pakistan’s economy is in deep trouble, citing the manufacturing sector still struggling to recover, textile sector exports declining by around 3% during July-January 2023-24, and foreign exchange reserves of $8 billion, which are insufficient to cover only 6 weeks of imports.
He said Pakistan needs $22 billion in external financing during 2024-25 to meet its financing needs.
To cope with these challenges, Pakistan urgently needs to boost industrialisation and exports. However, the repeated hikes in electricity and gas tariffs have made the cost of doing business very high which is hurting production activities and making exports uncompetitive in the international market.
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President KCCI emphasised that Karachi’s industries were demanding a reduction in gas tariffs to improve industrial activities. He expressed concern that increased gas tariffs would create more problems for the industry that would slow down the economic growth of the country.
He urged that the new government in consultation with the private sector should fix the utility tariffs for the next 10 years to enable better growth of business activities and revive the economy.
Bakhtawari, former President ICCI and Secretary General UBG, stressed that the government should privatise all loss-making utility companies to reduce their burden on the national exchequer and improve their performance.
Both chambers called for political stability in the country, which is the key requirement to achieve economic stability. They urged that the new government should give top priority to promoting ease of doing business to make Pakistan a hub of business and investment activities and enable it to emerge as a strong economy.
Both chambers agreed to work in close cooperation to address the key issues of the business community and create a conducive business environment.
Published in The Express Tribune, February 18th, 2024.
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