ISLAMABAD/LAHORE  -    The Islamabad Chamber of Commerce and Industry (ICCI) has strongly opposed any further hike in the gas tariff as it would unleash a new wave of high inflation for the general public that would be unbearable for them.

The ICCI has warned the government to desist from taking any such decision as it would bring disastrous consequences for the business sector. Ahmed Hassan Moughal, president ICCI, said that OGRA has allowed 47 percent or Rs.237 per unit (million British thermal unit) increase in the prescribed price of Sui Northern Gas Pipelines Limited (SNGPL) taking it from Rs.501 to Rs.738. Similarly, 28 percent or Rs.60 per unit increase has been allowed in the prescribed price of Sui Southern Gas Company Limited (SSGCL) taking it from Rs.578 to Rs738.

He further said that combined impact in the increase of prescribed price of both companies would put additional burden of around Rs.60 billion on their consumers, which was totally unjustified. He said that instead of improving the performance of gas companies and introducing reforms in them to reduce their losses, government was passing on the burden of their inefficiency to the people that was not justified.

Ahmed Hassan Moughal said that PTI government has already increased gas tariff up to 143 percent due to which consumers were paying exorbitant bills. He said that due to the record fall in the value of rupee, high cost of electricity and other factors, business community and the general public were already facing great problems and in these conditions any further hike in gas tariff would put unbearable burden on the common man that could cause problems for the government as well.

ICCI President said that gas was key input for industry and further hike in its price would cause manifold increase in production cost. He said Pakistan was already facing rising trade and fiscal deficits and to cope with these challenges, government should have taken measures to bring down the cost of doing business to facilitate the growth of business activities and enhance exports. However, he cautioned that any further hike in gas tariff would make our exports very uncompetitive leading to further slump in exports. He urged that government should turn down the proposals of OGRA for increasing gas tariff in order to save private sector and the common man from further troubles.

Rafat Farid, Senior Vice President, and Iftikhar Anwar Sethi, Vice President, Islamabad Chamber of Commerce and Industry, have also said that government should not increase the gas prices.

Meanwhile, As the OGRA, after up to 143 percent hike in gas prices last year, has sought up to 47 percent further increase in the prices of gas for 2019-20, the Pakistan Industrial & Traders Associations Front has criticized the demand, terming it a deal with the IMF, saying the cost of doing business has already increased manifold, leading to constant decline in exports and high trade deficit.

PIAF former chairman Irfan Iqbal Sheikh observed that the OGRA has recommended an average of 47 percent hike in Sui Northern Gas Pipelines Limited (SNGPL) system and 28 percent in Sui Southern Gas Company (SSGC) system which would severely damage the industry.

He said that it is unfortunate that the decision to seek an increase in gas tariffs came at a time when Pakistani rupee has taken a plunge in open and interbank markets days after the announcement of a deal between the International Monetary Fund (IMF) and the federal government. According to the deal, the government will increase gas and power prices.

PIAF former chairman said that value-added industry was contributing to its role in national exports in addition to providing jobs to millions of workers. But, increased cost of doing business was hurting Industry which must be curtailed to get maximum share for Pakistan economy.

He said that the devaluation of Pakistani rupee against the US dollar was already hurting the growth of the economy and industry. He said that last year, the government had ended subsidy on gas prices and increased gas prices by up to 143 per cent 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.

He had said the cumulative losses of gas companies were Rs154 billion each year, adding that gas worth Rs50b was being stolen with impunity.

He urged the government to control line losses, electricity theft and inefficiency in recovery of dues and help stop political interference in energy sector that has reduced the country’s economic growth.

PIAF chairman Mian Nauman Kabeer said it was not only the economy that had been facing a meltdown-like situation but the entire country had been in the grip of multiple challenges. There is no second opinion about it that effective governance is critical to economic reforms but if the cost of doing business continues to undermine the growth then how one can expect an economic turnaround in coming years?, asked Mr Nauman.

The PIAF, he said, 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.