As tariffs rise, traders seek Rs 400bn relief package

KARACHI, PAKISTAN:

While rejecting the recent hike in gas tariffs, industrialists and traders have appealed to the caretaker government to provide a bailout package of Rs 200-400 billion to small and medium enterprises (MSMEs) for their survival and to cope with the new tariff.

“The government didn’t think about the media at all. they are frustrated by the exorbitant electricity bill and rising gas rates. The gas price notification is ready and can be signed today or tomorrow,” said Federal Industrial Association of Commerce and Industry (FBATI) president Syed Raza Hussain.

“It is a big issue of survival for SMEs. Small businesses like bakeries, food processors and others would not be able to survive in such trying times,” he said and urged the government to immediately announce a bailout package of Rs 200-400 billion for MSMEs for at least one quarter.

He was of the view that the increase in gas tariffs would further push up inflation. For example, if a small industry pays a gas bill of Rs 200,000 per month, it will increase to Rs 375,000, which will cost consumers an additional Rs175,000.

The government should subsidize MSMEs instead of the domestic sector, he stressed while pointing out the Rs 384 billion subsidy announced by the government, which includes Rs 139 billion for the domestic sector, Rs 45 billion for the fertilizer sector and 200 billion For Tandoors Rs.

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He warned that if small factories began to close down, it would cause unemployment and spark social ills.

“Apart from captive power plants, entire small and non-export industries will be shut down as no industry can survive with this gas tariff,” said North Karachi Association of Commerce and Industry (NKATI) President Faisal Moiz Khan.

The high duty could destabilize the entire industry of Karachi as well as the country, which would never come out of the financial crisis, he warned.

Khan emphasized that SMEs could bring about an industrial revolution, as they did in Bangladesh, China and Taiwan, as they formed the backbone of industries.

Drawing the attention of the government, he said that UAE and Bangladesh have shifted the domestic sector to liquefied natural gas (LPG) and Pakistan should follow the same model by providing domestic gas to the industry for economic revival.

He recommended that all white elephants including Sui Southern Gas Company (SSGC) and other public sector organizations should be privatized for a better financial situation.

“Increasing gas tariffs will add to the misery of the poor and needy. If the gas tariff is increased, electricity prices will automatically increase because independent power producers are generating electricity with the help of natural gas,” said All Karachi Tajir Ittehad President Attique Mir.

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“Furthermore, there is no buyer in the market as consumers only buy food and vegetables. Traders are sitting idle in their shops due to rising inflation.”

Pakistan Textile Mills Association (Aptma) South Zone President Zahid Mazhar, while strongly rejecting the sudden hike in gas tariffs, observed that it would prove detrimental to the textile industry, which was already suffering due to high cost of doing business. .

He said the hike in natural gas prices for export-oriented industries by an unprecedented 118% from Rs 1,100/mmBtu to Rs 2,400 will further reduce Pakistan’s exports, particularly textile shipments.

Published in The Express Tribune, November 3^rd2023.

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