Karachi industries to shut down on Dec 4 over gas price hike

Karachi: Karachi's industrialists said they will shut down all their factories on Monday, December 4, to protest against a recent increase in gas tariffs that they say has made production unviable.

They demanded that the government implement the gas rates of Rs1,350 per MMBTU (Million British Thermal Units) approved by OGRA, the oil and gas regulator, instead of the current tariffs ranging from Rs2,100 to Rs2,600 per MMBTU.

"We announce that our protests have become stronger as Lasbela Chamber from Baluchistan along with Nooriabad and Kotri Chambers have also joined our protest and assured to fully endorse all the strategies adopted by KCCI to deal with the situation," Jawed Bilwani, Vice Chairman of Businessmen Group (BMG), said at a press conference held at the SITE Association of Industry on Thursday.

"We have already displayed protest banners at the offices of all trade associations and today, we announce closure of all industries on December 4 (Monday), if the legitimate demand providing gas at 1,350/- MMBtu is not met by the government."

Bilwani reiterated that the business community appeals to the government to bring down gas tariff to Rs1350 per MMBtu which has been determined as 100 percent cost of gas by OGRA and include approximately 22 percent profit of SSGC as well.

He said that after holding two press conferences on the same subject at KCCI and NKATI, this was the third one and the business community would continue to raise a stronger voice until their legitimate demand to bring down gas tariff is fulfilled by the government.

Bilwani added that the new gas tariff has burdened the industries with cross subsidy for undeserving and unfair support to fertilizer, domestic and power sector.

"The industry demands fair gas tariff of Rs1350 per MMBTU but would never accept the unbearable and unabsorbable gas tariffs ranging from Rs2100 to Rs2600 per MMBTU which have been imposed to please the fertilizer, domestic and power sectors and terribly penalize the industrial sector of the country that forms the backbone of the economy," he added.

He also pointed out that in Pakistan, gas to fertilizer sector is being provided at a much lower rate which was not making any sense as this was a sector which enjoys a profitability of around 20-22 percent and 40 billion rupees in subsidy in gas tariff, which was very strange and beyond anyone's understanding.

Muhammad Kamran Arbi, President of SITE Association of Industry, said that the new gas tariff is simply unbearable for industries and the government should take notice and bring it down to 1350 rupees per MMBTU, as set by OGRA. He demanded of the government to hold a meeting with the industry stakeholders to reach a consensus on the gas price since the existing tariff has outgrown the manufacturing costs.

He further stated that the business community still awaits the promised winter package for incremental consumption of electricity wherein it was agreed to provide electricity at reduced tariff of 20 rupees per unit on incremental consumption during four months of winter season.