The business community has termed the recent increase in gas tariff by 31 percent, CNG, steep increase in petroleum prices, increase in power tariff as well as proposed increase in power tariff by Rs 10 per unit as a conspiracy against the elected government with special reference to general public and industry.
They said that the increase has been made at a time when the industry is facing closure and exports are on decline, unemployment rising and cost of doing business at peak. They termed the steps as big mistake on the part of the government. They feared that a large number of units particularly small and medium sector units would go out of production rendering large number of people jobless.
They termed the rise in gas tariff as last nail to the ailing industry especially textile sector, which is the backbone of the economy and earning mush needed foreign exchange through exports. They said that increase in gas, power and oil prices will make Pakistani products costlier and uncompetitive in the international market.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Tanvir Ahmed Shaikh in his comments said that the country's economy is not in a position to absorb such sudden and large shocks. He strongly reacted to the Orga notification and showed serious concern over an unprecedented rise in gas tariff.
He said that CNG prices have been increased thrice during this year. The first increase was made in January by 6 percent, then in March by 7 percent and now by Rs 13 per kg. A 68 percent increase in the gas price for captive power plants will be tantamount to murder of the industry especially textile industry, which is backbone of country's exports.
Karachi Chamber of Commerce and Industry (KCCI) President Shaminm Ahmed Shamsi said that this is an extra ordinary move by the government and is self defeating and contrary to government's own policy of supporting the textile sector by giving R&D, zero rating, rationalisation of tariff and other steps mainly to reduce the cost of manufacturing.
He urged the minister for petroleum and natural resources to immediately withdraw this increase and sit down with the stakeholders to find an alternative to resolve this crucial matter without hurting the industry and trade.
Pakistan Soap Manufacturing Association (PSMA) Chairman Tanvir Ahmed Sufi termed the recent increase in oil, gas and power tariff as an anti people act, that would force a good number of industries to close down.
He said that the industrial sector has already been facing innumerable problems due to heavy taxation and this phenomenal hike in gas, electricity and petroleum products will ultimately hit the common man and will be equal to damaging the local industry. The government is not fulfilling the promises, which it made with the people that after coming into power it will provide relief to the people by bringing down the prices of essential commodities.
Pakistan Denim Manufactures and Exports Association Chairman Dr Mirza Ikhtiar Baig said that this exorbitant increase in gas rates will adversely affect our industry and exports.
He said that one of the medium size factories paying monthly Rs 6.4 million will now have to pay Rs 10.7 million monthly. Towel Manufacturing Association of Pakistan (Southern Circle) Chairman Syed Usman Ali said that this unjustified rise in gas tariff would particularly hit industrial consumers including captive power plants since their sale price has been increased to Rs 329.54 per MMBTU from Rs 251.55.
The minimum monthly charges for the first two categories of the industrial sector have been fixed at Rs 11,111.89 per MMBTU from Rs 8,482.20 which would not only hit industrial growth but also give rise to cost of products by 15 to 18 percent.
All Pakistan Textile Processing Mills Association (APTPMA) Chairman Anees Motiwala said that China, Bangladesh, India and other countries have already established their monopoly over our export markets offering cheaper products causing severe problems to Pakistan's textile industry.
He said in this situation, hike in the prices of gas, which is a basic raw material of textile processing industry would multiply the hardships of industrialists. He urged the government to review its decision.
All Pakistan Textile Mills Association (Aptma) Chairman Iqbal Ebrahim said that before making any dramatic change in the gas prices, the stakeholders of the industry should have been taken into confidence and engaged to workout the gas tariff. He said that the recent hike in gas tariff would make textile export costlier and render Pakistan products uncompetitive in the international market.
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