Massive Gas Tariff Hike Sparks Industry Threats of ‘No Export Days’ Protest

Massive Gas Tariff Hike Sparks Industry Threats of ‘No Export Days’ Protest

Karachi, November 21, 2023 – The industrial sector has issued a stern warning, threatening to observe ‘No Export Days’ in vehement protest against the government’s substantial hike in gas tariffs.

In a unified stance, representatives of various industrial zones, under the banner of the Karachi Chamber of Commerce and Industry (KCCI), criticized the government’s poorly conceived decision, labeling it as ill-planned and shortsighted.

The KCCI, alongside all seven Industrial Town Associations and Value-Added Textile Associations, appealed fervently for the government to reconsider the gas tariff, urging a reduction to Rs1350 per MMBtu – a figure determined as the 100 percent cost of gas by the Oil and Gas Regulatory Authority (OGRA). The industry expressed readiness to pay this cost but vehemently opposed the imposition of subsidies.

During a press conference chaired by President KCCI, Iftikhar Ahmed Sheikh, business and industrial representatives voiced their concerns. Vice Chairman of the Businessmen Group, Anjum Nisar, Jawed Bilwani, Senior Vice President Altaf A. Ghaffar, and Vice President Tanveer Ahmed Barry, along with other key figures, condemned the recent surge in gas tariffs, predicting adverse consequences.

Jawed Bilwani, Vice Chairman BMG, warned of escalating protests if the government failed to address the industry’s demands promptly. He outlined a series of planned actions, including press conferences across industrial town zones, displaying protest banners, and observing ‘No Export Day’ once a week. Bilwani emphasized that if the government did not announce a reduction in gas tariffs by the first week of December, protests would intensify.

Bilwani highlighted the unfulfilled promises to the business community, citing the absence of the promised winter package for incremental electricity consumption at a reduced tariff of Rs20 per unit during the winter season.

The industry representatives argued that the new gas tariff imposed an unfair cross-subsidy burden on the industrial sector for the benefit of the fertilizer, domestic, and power sectors. They demanded a fair gas tariff of Rs1350 per MMBtu, rejecting the imposed rates ranging from Rs2100 to Rs2600 per MMBtu.

Furthermore, concerns were raised about the preferential treatment given to the fertilizer sector in gas pricing. Bilwani pointed out the stark difference between the gas tariff for the fertilizer sector in Pakistan and the neighboring country, calling it a matter of concern.

President KCCI, Iftikhar Ahmed Sheikh, underscored the potential negative impact of a 100 to 130 percent increase in industrial and captive gas tariffs on the economy. He warned of industrial closures, layoffs, and a surge in street crimes if the government persisted with the unwise decision.

The business and industrial community urged the government to immediately withdraw the gas tariff hike, bringing it down to an acceptable level of Rs1350 per MMBtu. The industry stakeholders hope for a prompt government response to avert the looming crisis and protect the stability of the country’s economic landscape.

The press conference was attended by key representatives from various trade and industrial associations, emphasizing the widespread concern and united opposition to the gas tariff hike.