Karachi, November 13, 2023 – The SITE Association of Industry (SAI) in Karachi has vehemently opposed the significant surge in gas tariffs, citing the adverse impact it is having on the industrial sector.
An emergency meeting was convened by SAI to formulate a strategy for future action in response to the recent exorbitant increase in industrial gas tariffs, a move that has rendered many industries in Karachi economically unviable.
During the meeting, SAI leaders expressed deep concern over the substantial hike in gas tariffs, stating that it has made it increasingly difficult for industries in Karachi to operate competitively, particularly when compared to neighboring countries. The leaders emphasized that the current spike in gas tariffs is unsustainable for industries already grappling with high production costs.
In the SITE area, positioned at the tail-end of the Sui Southern Gas Company (SSGC) network, there is a lack of assurance regarding gas pressure, even with the escalated tariffs. The insufficient gas availability and poor pressure have compelled industrialists in the SITE area to resort to alternative fuels like wood and coal. This not only raises environmental compliance issues for exporting industries but also contributes to deforestation in the country.
Expressing their concerns further, SAI leaders indicated that the dire situation could force industrialists to shutter their units in Karachi. Such closures could lead to a surge in unemployment, potentially triggering law and order issues due to a sudden spike in street crimes, a direct consequence of widespread joblessness.
The association members also voiced reservations about the government’s subsidy policy, asserting that it disproportionately favors the fertilizer and domestic sectors at the expense of industries, whether general or export-oriented. Despite raising the matter with high-ranking government officials, including the Federal Energy Minister, the Federal Finance Minister, and the Prime Minister of Pakistan, the concerns of SAI have gone unaddressed.
In response to the current crisis, the meeting participants demanded that the government apply the tariff of Rs1350 per million British thermal units (MMBTU), a rate determined by the Oil and Gas Regulatory Authority (OGRA), to industries. This rate is considered to be the actual cost of gas.
Industrialists at the meeting unanimously resolved that the industries in the SITE area would initiate continuous protests against the government. They view the decision to significantly increase industrial gas tariffs as unwise and unsustainable, especially considering the already substantial burden of the highest manufacturing costs. The situation has rendered these industries unviable and non-competitive, prompting a unified stand against the government’s decision. The industrial sector is determined to voice its grievances and seek a resolution to ensure the survival of businesses and the preservation of jobs in Karachi.
