PIAF hails PM’s intervention to delay hike in gas tariffs

F.P. Report

LAHORE: The Pakistan Industrial and Traders Associations Front on Sunday hailed Prime Minister Imran Khan for his intervention to defer a massive increase in gas tariffs by the Economic Coordination Committee (ECC) of the federal cabinet, urging him to reject this proposed hike of up to 191% on permanent basis.

PIAF chairman Mian Nauman Kabir, in a joint statement along with the senior vice chairman Nasir Hameed and vice chairman Javed Iqbal, stated that charges of mismanagement have dogged the government, as the country has been rocketed by a series of crises.

Nauman Kabir said that the government has already exploded gas bomb by raising gas prices up to 197 percent last year in July, which has jolted the country’s economy by increasing the cost of production in both agriculture and industrial sectors. The increase in gas prices amounted to taxing the people and imposing a mini-budget on them and destroying the sanctity of the national budget, he added.

Rejecting another massive hike in gas prices, he appealed the PM to freeze the rates of gas as well as electricity, especially for the industry, as it will open floodgates for inflation, which will take a toll on people and the economy.

The OGRA had forwarded a summary for raising gas tariff by 191 percent to the ECC for approval. A significant increase from Rs20 to Rs80 as meter rent for domestic consumers was also proposed. The summary also sought increases in gas tariffs by 214% for the Sui Southern Gas Company and 192% for the Sui Northern Gas Pipelines Limited. It also proposed a rise of up to 245% for the special commercial consumers, 221% increase for commercial consumers of the SNGPL and 153% for fertiliser sector. Furthermore, it proposed a 32 percent increase in gas tariff for captive power plants that would have serious implications on the productivity of leading export oriented sectors, and the CNG sector. The proposal sought to raise the prices with effect from Feb 1, 2020. OGRA had on Dec 11 last year decided to increase the gas tariffs.

Mian Nauman Kabir said that settling gas sector circular debt of Rs181 billion by burdening the masses is unjustified. He said that gas tariff hike would trigger inflation and increase poverty in the country as it will also increase tariff of electricity, make production costly and hit exports.

PIAF senior vice chairman Nasir Hameed noted that gas is a very important part of Pakistan’s energy mix, therefore, a hike in the tariff will hit almost everyone. The gas prices for tandoor will go up by 245 per cent while gas for the CNG sector is to get 31 per cent more expensive. He said that losses of the gas companies are running into billions of rupees due to mismanagement, incompetence and corruption that is shielded through frequent tariff hikes, which is not a sustainable solution.

PIAF vice chairman Javed Iqbal opposed the massive rise in utility rates, which is an outcome of negotiations with the International Monetary Fund, raising input costs to a prohibitively high level thereby constraining productivity, and employment opportunities as well as accounting for an ever increasing erosion of each rupee earned by an average householder. He said that the government miserably failed to take appropriate mitigating measures to forestall shortages that may lead to massive escalation in prices of our major food items, including the staple wheat.

The PIAF leadership said that it would have adverse impact on cost of manufacturing and common masses who are already burdened with the price hike of essential commodities and which is feared to shoot up further following the price increase in gas prices. They said that it would further compound the miseries of both general public and business community.