PIAF rejects government’s plan to raise gas prices

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LAHORE: Pakistan Industrial and Traders Associations Front (PIAF) has rejected plans by the government to increase gas prices by 5 to 7 per cent.

PIAF Chairman Irfan Iqbal Sheikh in a joint statement along with Senior Vice Chairman Tanveer Ahmed Sufi and Vice Chairman Khawaja Shazeb Akram stated that a 7 pe cent gas tariff hike will put the additional burden of around Rs18 billion on consumers, increasing the cost of production in the industry.

He said that instead of covering losses and enhancing the efficiencies, the two gas utilities Sui Southern Gas Company Ltd (SSGCL) and Sui Northern Gas Pipeline Ltd (SNGPL) are shifting their burden to the consumers.

The government plea is that if the two companies were not given Rs18 billion through gas tariff, they would turn negative and the government would have to inject funds from the budget to keep them floating.

“Exporters and manufacturers are already greatly burdened and crushed due to rising tariffs of electricity, gas, water and other essential sources of power, leading to high costsof doing business in Pakistan as compared to our competing countries” PIAF Chairman remarked.

Chairman PIAF called upon the government to take concrete measures and formulate effective policies to reduce the cost of doing business so as to jack up the country’s exports. “Government should merge all taxes, duties and contribution etc and introduce one-window operation for one-time payment of all dues” he sugested.

Gas tariff per MMBTU in dollar terms in Bangladesh was $3.35, India $4.66, and Vietnam $ 6, but in Pakistan it is $7.59 (including Rs200 GIDC-Gas Infrastructure Development Cess).

He added that electricity tariff per kwh (kilowatt hour) in Bangladesh was $0.09, India $0.09, and Vietnam $0.08, and in Pakistan, it is $0.11. Therefore gas tariffs for the export industry should be reduced at least by 10 per cent less than of tariff in regional countries.