Industry leaders decry skyrocketing gas prices

Call for govt, SIFC intervention as businesses struggle to survive

KARACHI:

Expressing condemnation of the over 220% increase in gas tariffs within one year, business leaders have appealed to the newly-elected government and the Special Investment Facilitation Council to take notice, review the situation, and primarily focus on research and development (R&D) aimed at ensuring alternative fuel sources for the local industry.

In an interview with The Express Tribune, President of the Hyderabad Chamber of Commerce and Industry, Adil Siddiqui, highlighted the necessity for the government to prioritise R&D to provide alternative fuel options for the local industry. He pointed out the limitations of solar and wind energy projects in certain regions like Punjab, where cloudy weather predominates, while suggesting that wind energy projects may be suitable for areas like Thatta, characterised by strong winds. Siddiqui underscored the urgent need for cost-effective alternative fuel solutions, citing the significant burden on industries in the current economic climate. He illustrated the impact by highlighting the drastic increase in utility bills faced by small industries, which have risen from Rs10 million to Rs30 million per month.

Read: PM directs uninterrupted gas, power supply in Ramazan

All Pakistan Textile Mills Association (APTMA) South Zone (Sindh), Chairman, Zahid Mazhar highlighted the adverse effects of the 223% increase in gas tariffs within a year. He stated that this surge has led to a 30% capacity closure among firms in the textiles and apparel sector, with the remaining facing a high risk of complete closure in the coming weeks due to becoming uncompetitive in the international market compared to regional competitors such as India, Bangladesh, and Vietnam. Mazhar lamented the underutilisation of the textile industry’s export capacity, amounting to $600 million per month, attributing it primarily to the high energy costs that hinder local industrialists’ ability to compete globally.

He explained that the export-oriented textile industry is rapidly deteriorating, leading Pakistan to lose market share in the global marketplace due to the alarming rise in energy tariffs. Mazhar highlighted the disparity in energy costs, with local industries paying significantly higher rates than their counterparts in competing countries. He noted that while Pakistan provides grid electricity at Rs52 per kilowatt-hour (kWh) or 18 cents/kWh, competing countries offer much lower rates like India which charges $6.5/mmBtu, Bangladesh $7.5/mmBtu, and Vietnam $9.80/mmBtu for gas or RLNG for the textile sector.

Calling for an immediate reduction in gas prices and ensuring uninterrupted supply to industries, President of the Hyderabad Chamber of Small Traders and Small Industry, Muhammad Farooq Shaikhani, expressed concerns about the inadequate gas supply provided by Sui Southern Gas Company Limited, which operates for only 15 out of 24 hours per day with dangerously low pressure. He also criticised the reduction in gas supply during Ramazan, as per the issued notification, stating that such actions only exacerbate the challenges faced by industries. He alleged manipulation of statistics, claiming that exorbitant bills ranging from Rs10,000 to Rs12,000 are being collected under the guise of irregular services.

Published in The Express Tribune, March 12^th, 2024.

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