KCCI opposes proposed hike in gas tariff

President Karachi Chamber of Commerce and Industry (KCCI) Iftikhar Ahmed Vohra has said that Karachi Chamber will strongly oppose the proposed hike in gas tariff as it would result in rise in cost of doing business, slow down economic activities and increase unemployment.
In a statement issued here, KCCI President stated that the proposed increase in gas tariff would have a devastating impact on various industries, particularly the value-added textile sector due to exorbitant rise in cost of production.
Vohra demanded of the government to avoid any increase in gas tariffs otherwise, the business community will have no other option but to shift their businesses to other countries where the cost of doing business is much lower.
He further noted that globally the prices of both POL and gas were decreasing but unfortunately, Pakistan's policymakers are moving in the opposite direction by increasing GST on POL and now planning to raise gas prices, which has triggered anxiety amongst businessmen and industrialists.
President KCCI feared that many important sectors of the economy including textile, leather, confectionary, iron, steel, beverages and many other gas consuming industries would either close or layoff staff with a view to cut manufacturing cost.
He said that the business community realizes that the government was faced with fiscal space but internationally it remains the norm that utilities cannot be subjected to revenue generation and this was also the part of Constitution of Pakistan. "Therefore, we strongly believe this should not be subjected to revenue generation," he added.
Iftikhar Vohra, while expressing concerns over rumors that formula for determination of tariffs was being revisited, said that the current formula based on WACOG (Weighted Average Cost of Gas) was fulfilling the requirement of just and reliable calculation. He added that the Karachi Chamber does not support any alteration or amendment to the current formula.
He further pointed out it was a matter of grave concern that UFG (Unaccounted for Gas) was also being enhanced which was totally unjustified, unethical and anti-business as this simply means penalizing the honest consumers and let the dishonest continue their unscrupulous activities. "Under no circumstances, this can be acceptable to any businesses," said Iftikhar Vohra.
"Our arch rivals including Bangladesh, India and Sri Lanka would greatly benefit due to rise in gas tariff and Pakistan, despite the grant of GSP Plus status by European Union, has not been able to enhance its exports mainly due to high cost of doing business. This singular step enhancing the gas tariff would widen the differences and retard the exports from Pakistan," he added.
Iftikhar Vohra was of the view that the entire nation was already overburdened and trying to survive in extremely dire circumstances due to price hikes, load shedding, unemployment, poverty, terrorism, lawlessness and now the proposed hike in gas tariffs from 10 percent to 65 percent would surely break the backbone of people.-PR