As the Ogra, after up to 143 percent hike in gas prices last year, has sought up to 47 percent further increase in the prices of gas for 2019-20, the Pakistan Industrial & Traders Associations Front (PIAF) has criticized the demand, terming it a deal with the IMF.
PIAF former chairman Irfan Iqbal Sheikh said the cost of doing business has already increased manifold, leading to constant decline in exports and high trade deficit. The Ogra has recommended an average of 47 percent hike in Sui Northern Gas Pipelines Limited (SNGPL) system and 28 percent in Sui Southern Gas Company (SSGC) system which would severely damage the industry.
He said that it is unfortunate that the decision to seek an increase in gas tariffs came at a time when Pakistani rupee has taken a plunge in open and interbank markets days after the announcement of a deal between the International Monetary Fund (IMF) and the federal government.
According to the deal, the government will increase gas and power prices, he said. The value-added industry is contributing to its role in national exports in addition to providing jobs to millions of workers. But, increased cost of doing business was hurting Industry which must be curtailed to get maximum share for Pakistan economy, he added.
He said that the devaluation of Pakistani rupee against the US dollar was already hurting the growth of the economy and industry.
He said that last year, the government had ended subsidy on gas prices and increased gas prices by up to 143 per cent by creating six new slabs.
Though the government at that time had claimed that it would not put a burden on domestic consumers as the increase in gas tariff mostly affected the commercial entities, the domestic consumers were also on the receiving end of the hike, he said. The cumulative losses of gas companies were Rs 154 billion each year, adding that gas worth Rs50b was being stolen with impunity, he said. He urged the government to control line losses, electricity theft and inefficiency in recovery of dues and help stop political interference in energy sector that has reduced the country's economic growth.
PIAF chairman Mian Nauman Kabeer said it was not only the economy that had been facing a meltdown-like situation but the entire country had been in the grip of multiple challenges. There is no second opinion about it that effective governance is critical to economic reforms but if the cost of doing business continues to undermine the growth then how one can expect an economic turnaround in coming years?, he questioned.
The PIAF, he said, had been calling on the government since long for the introduction of much needed reforms in the energy sector but unfortunately all its appeals had fallen on deaf ears with the result of huge cut in country's economic growth.
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