KARACHI: Pakistani industrialists in the country’s commercial hub of Karachi have announced a complete production shutdown on Monday, Dec.4, to force the government to reverse a hike in gas prices.
On Oct. 31, Pakistan announced a sharp increase in the price of natural gas for most households and industry ahead of the cash-strapped country’s first review of a $3 billion International Monetary Fund (IMF) bailout.
Gas tariffs for industry have increased to about Rs2,600 per Metric Million British Thermal Unit (MMBtu), which industry leaders say should be brought down to Rs1,350 per MMBtu, determined as the 100 percent cost of gas by the national regulator.
“The industrialists of Karachi have declared shutdown of all industries on Monday, December 4,” a representative body of industries in Sindh province, of which Karachi is the capital, said in a press release on Thursday.
“We announce that our protests have become stronger as Lasbela Chamber from Baluchistan [province] along with Nooriabad and Kotri Chambers have also joined our protest and assured to fully endorse all the strategies adopted by Karachi Chamber of Commerce and Industry (KCCI) to deal with the situation.”
Jawed Bilwani, vice chairman of the ruling Businessmen Group (BMG) at KCCI, said industries had already put up protest banners at the offices of all trade associations.
“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 … terribly penalize the industrial sector of the country that forms the backbone of the economy,” Bilwani said.
President SITE Association of Industry, Muhammad Kamran Arbi, said the new gas tariff was “simply unbearable” for industries, calling on the government to hold a meeting with industry stakeholders “to reach a consensus on the gas price since the existing tariff has outgrown the manufacturing costs.”
Last month, while announcing the hike in gas tariffs, Energy Minister Muhammad Ali said the tariff increase would generate nearly 400 billion rupees ($1.42 billion), adding that the state-run gas sector would from now on face no losses.
Energy sector debt has been the main issue that the IMF has highlighted in tackling the fiscal deficit and it has been recommending measures to deal with it.
