Govt urged to withdraw gas cess

KARACHI: Businesses on Wednesday urged the government to withdraw gas infrastructure development cess (GIDC) and the recent increase in gas tariff to save Pakistan’s exports from further deterioration.

President Younus Muhammad Bashir of the Karachi Chamber of Commerce and Industry (KCCI), in a statement, expressed concern over the descending exports, and the reports of a further increase in the gas tariff from July 1.

Bashir urged the government to immediately withdraw GIDC and the recently implemented 23 percent increase in gas tariff.

“If appropriate steps are not taken on war footing basis, there will be a further decline in terms of exports, especially in the value-added sector,” he said. “Industries in Sindh are being penalized in terms of tariffs as the industries in North have been receiving gas at a much lower price.”

Bashir requested the Ministry of Petroleum and Natural Resources and the Ministry of Finance to seriously look into the production and exports, particularly in the Textile Sector that has gone down by 14 percent which is very alarming.

President KCCI said the falling exports are not because of the products quality, but merely because of high cost of manufacturing in Pakistan as compared to the neighbouring countries.

He said Indian government reduced gas prices, which will bring in more competition. “Indian gas tariff rate is already eight percent lower as compared to Pakistan which has been reduced further by 20 percent to around Indian Rs321/million metric British thermal unit as compared to Rs700/mmBtu in Pakistan.

Other challenging aspects, he added, are pending sales tax refunds, claims of drawback on local taxes and levies and customs rebates.