PESHAWAR: The Khyber Pakhtunkhwa Textile Mills Association (KPTMA) has made a resounding declaration against the increase in gas prices and the policy of supplying blended gas to the KP industries.
At an urgent meeting convened at the KPTMA House here on Tuesday, all member representatives unanimously rejected the sharp hike in gas rates and the suggested implementation of blended gas for industries in KP.
Muhammad Kamran Shah, Chairman of KPTMA, expressed concerns over the significant gas price surge and recommended that the government, before finalizing any decision, engage in thorough consultations with all stakeholders. He emphasized the importance of seeking insights from gas-producing provinces.
He went on to draw attention to the apparent disparities, indicating that the Oil and Gas Regulatory Authority (OGRA) had determined an estimated revenue requirement for Sui Northern Gas Pipelines Limited (SNGPL) at Rs. 1,238.49/per MMBTU.
In contrast, the government had declared an effective rate of Rs. 2,400 per MMBTU for the KP industry, incorporating cross-subsidies to benefit the Feedstock / Fertilizer sector and the domestic sector.
Shah questioned the proposal to introduce blended gas for KP at 80:20 ratios; despite the fact that Khyber Pakhtunkhwa neither consumes Re-gasified Liquefied Natural Gas (RLNG) nor relies on it, as the province remains a net gas producer, exporting a substantial portion of its output.
Shah emphasized the unique challenges faced by KP, pointing out that it is a landlocked province, distant from major markets and seaports.
The region contends with elevated operational costs due to the expense of skilled labor, high transportation costs, and limited access to the raw materials readily available to industries in other provinces of Pakistan.
The Chairman voiced his concerns that such an increase in gas prices would render the KP industry uncompetitive when compared to the industries in Punjab and Sindh.
This could deliver a severe blow to KP’s industrial sector, potentially forcing even the surviving businesses to shut down due to the exorbitant cost of conducting operations in the region.
This situation could result in increased unemployment and frustration among the people of the KP province, potentially exacerbating the existing issue of terrorism in the region.
Shah reiterated that the gas prices determined by OGRA were not only justifiable as the province continues to serve as a net exporter of gas and does not rely on RLNG.
He earnestly urged the Federal Government to reconsider the proposed gas price increase and to consult all relevant stakeholders before its implementation.
In conclusion, he appealed to the Federal Government to introduce special concessional rates for gas and electricity in the KP province. This would help alleviate the economic impact of terrorism and promote industrial development, subsequently generating employment opportunities in the terrorism-affected region.
Copyright Business Recorder, 2023
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