90% of Sindh-Balochistan industries closed down

KARACHI:

Industrialists claimed that nearly 90% of industries in Karachi and other industrial zones of Sindh and Balochistan remained closed on Monday to protest the higher duty on natural gas.

“Nearly 90% of the industries in all the seven industrial zones of Karachi, along with other commercial bodies and industrial zones of Sindh and Balochistan, including the Lasbela Chamber of Commerce and Industry (LCCI), Nooriabad, Kotri and Hyderabad, have closed in solidarity. with the Karachi Chamber of Commerce and Industry (KCCI),” said Vice President of the Businessmen Group (BMG) Jawed Bilwani while addressing reporters at a press conference at the SITE Association of Industry (SAI) conference room.

He reiterated that business leaders in Karachi are demanding that the government reduce natural gas tariffs to Rs 1,350 per mmBtu as already set by the Oil and Gas Regulatory Authority (OGRA), including a 22% profit for Sui Southern Gas Company ( SSGC).

He expressed that if industries bear all the costs and cross-subsidies, it would be extremely difficult for industrialists to run factories and create jobs. Bilwani lamented every government’s focus on borrowing instead of working to boost exports and industries. He criticized the caretaker government for struggling to attract foreign investment while neglecting initiatives to boost industries and exports to create jobs.

The new gas tariffs are considered unaffordable and industrialists find it difficult to operate the units properly at the newly imposed rates. Bilwani highlighted the unfair support of fertilizer, power and household sectors, while the industries that drive the economy are being neglected, despite many appeals. He expressed his disappointment that no policy maker or cabinet member has approached them for a meeting to address this burning issue. The new natural gas tariffs, ranging from Rs 2,100 to Rs 2,600 per mmBtu, are unbearable and unacceptable. Bilwani stated that if the industries are running, they should suffer, and if the industries are closed, the government should suffer. Plans for a comprehensive strategy will be developed in consultation with all members over the coming days. However, starting tomorrow, industries will continue to operate as normal.

Responding to a question about the local stock market setting a new record following improvements in the national economy, Bilwani noted that the vast majority of buyers are sponsors in the market, contributing to its rise.

Reading: FPCCI urges government to stop hike in gas tariffs

Supporting the demands and views of other industrialists, SAI President Muhammad Kamran Arbi stressed that government officials should approach the industry leadership to discuss with them for amicable and immediate resolution of the issues. He asked for the promised winter package to support the increased electricity consumption during the winter season.

OGRA President at FPCCI

Meanwhile, in response to queries at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), OGRA Chairman Masroor Khan briefed the media about the gas tariff mechanism.

“OGRA reviews the revenue requirements of both Sui Northern Gas Pipelines Limited (SNGPL) and SSGC twice a year to take decisions based on the requirements. OGRA fixes gas tariff at Rs 1,350 per mmBtu based on revenue requirement. Assuming Rs 1,350 is the gas tariff, Roti Tandoors in Karachi and across the country are charged Rs 122 per mmBtu. If the price for Roti Tandoors is increased to Rs 1,350 per mmBtu, it would be unfair.

OGRA fixes a rate for 17 categories of consumers. We need to write a letter to the government to guide OGRA on how to charge consumers of various categories. The government has divided the household sector into two categories: protected and unprotected consumers. Therefore, the government must charge the industry in terms of cross-subsidies to provide relief to those consumers who pay a lower tariff. High tariffs mean nothing to the pocket of the government or OGRA [the rate difference] not at all.”

Published in The Express Tribune, December 5^u2023.

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