The Businessmen Panel (BMP) of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has warned the governments of increasing up to 31 percent gas price, as gas companies have sought an increase of up to Rs194 per unit in their tariffs.
BMP Chairman Mian Anjum Nisar said that the cost of doing business has already been increased manifold, leading to constant decline in exports but the Sui Southern Gas Company and Sui Northern Gas Pipelines Limited are planning to put an additional revenue burden of about Rs94 billion on domestic as well as the industrial consumers, as they are planning to increase their tariffs, though the government has already raised gas prices by up to 190 percent in July this year under tough conditions of the $6 billion International Monetary Fund (IMF) loan programme.
He said that electricity prices were also increased by Rs1.50 per unit which is unfortunate. He also condemned the government for increasing prices of three major petroleum products on 1st of Nov, which will cause an additional burden of about Rs700 million on consumers in this month. He said that it is unfortunate that besides the 17 percent GST, the government has more than doubled the rate of petroleum levy on HSD in recent months to Rs21 per litre from Rs8 per litre, while levy on petrol has also been increased by 50 percent to Rs17.20 per litre from Rs10 per litre.
The government has also increased general sales tax on all petroleum products to the standard rate of 17 percent to generate additional revenue. He said that last year, the government had ended subsidy on gas prices and increased gas prices by up to 143 percent 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,
Mian Anjum Nisar said that the BMP 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. The gas companies are only concerned with their profits disregarding the fact the increasing price of gas will reduce demand and increase the theft, besides stoking inflation and hitting production in the industrial sector, also damaging exports volumes.
It is pertinent to mention that at present, the average prescribed price of SNGPL is Rs624.93 per MMBTU while the same for SSGC is Rs735.48 per MMBTU, he said. However, SNGPL has proposed OGRA to set the average prescribed gas price at Rs818.95 per MMBTU while SSGC has proposed to fix the same at Rs799 per MMBTU, he added.
The SNGPL has asked the OGRA to increase its gas price by 31 percent (Rs115.54 per MMBTU) while SSGC has sought 8.5 percent (Rs62.52 per MMBTU) hike in its gas price. Besides proposing the increase in gas price, SNGPL also asked OGRA to approve Rs78.46 per MMBTU on account of previous year's shortfall, taking the overall hike to Rs194.01 per MMBTU in its gas price, he said.
Copyright Business Recorder, 2019