KARACHI: Faraz-ur-Rehman, President of the Korangi Association of Trade and Industry (KATI) and the founder president of Pakistan Business Group, has expressed deep concern over the recent surge in gas prices, emphasizing its potentially detrimental impact on the industrial sector.
Referred to as a “historic increase,” the rise in gas prices, according to Faraz-ur-Rehman, poses a significant challenge to the industry’s sustainability. The sharp hike in gas prices threatens to render the manufacturing of products financially unviable, especially when production costs are already beyond reach for many.
Faraz-ur-Rehman has described the move to increase gas prices as “disastrous” and “impractical,” particularly for small and medium-sized enterprises (SMEs) that are the backbone of industrial production.
This hike will not only affect large-scale manufacturers but also SMEs and even the cottage industry, potentially grinding industrial activities to a halt.
The ramifications of such a halt would be catastrophic in terms of employment. The country’s economy is ill-prepared to withstand a shutdown of the industrial sector and the ensuing wave of unemployment.
Furthermore, Faraz-ur-Rehman has highlighted that this increase in gas prices came at a time when Pakistan is already grappling with a severe economic crisis. Industries are already contending with a gas shortage, with Sui Southern Gas Company (SSGC) supplying around 350 million cubic feet per day (mmcfd) of gas to industries, accounting for 10 to 12 percent of the total available gas.
The motive behind raising gas rates, according to Faraz-ur-Rehman, is to reduce the revolving debt, but it is the industry that will bear the brunt of these measures. The consequences of industrial closures would result in inflation, rising unemployment, increased poverty, and hunger.
Meanwhile, the government is imposing the burden of capacity charges from power generation institutions on both the public and the industry, further adding to the challenges faced by industrialists.
This additional financial burden may hinder the industry’s ability to compete in the global market, thereby endangering the prospects of exports.
Faraz-ur-Rehman has made a fervent appeal to the Prime Minister and the Energy Minister, urging them to consider reducing gas prices for the industry. Failure to do so may force industrialists to contemplate the unfortunate decision of shutting down their operations.
He also emphasized the urgent need to address line losses, which are adversely affecting the industry, and to bring them under control promptly.
Copyright Business Recorder, 2023
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