More Sindh industries on verge of closure after gas tariff hikeBreaking

March 01, 2024

The industries in the Sindh province have expressed serious concern over the latest hike in gas tariff, which according to them, will lead to the closure of more units and cause further increase in joblessness, reports WealthPK. According to the industrialists, the manufacturing cost of export-oriented industries in Pakistan was comparatively higher, thus leading to an uneven level playing field. Under such adverse circumstances, they said, the industries will be unable to meet the export targets. They urged the policymakers to realize the gravity of the situation and revise the policies/decisions ensuring an enabling environment for the industries to operate. They requested that the prime minister intervene in the matter and call the stakeholders meeting to address the matter appropriately in the national interest. “The uncalled-for, unbearable and exorbitant increase in gas tariff and other costly industrial inputs owing to the mammoth rupee-dollar disparity and lack of a level playing field to compete globally has brought the industries to the verge of closure,” said Muhammad Jawed Balwani, Chief Coordinator of Value-Added Textile Forum, while talking to WealthPK.

He said the export-oriented industries are confronting an unprecedented increase in the cost of manufacturing, which has brought the industrial production and exports to a standstill. Many industries have already shut down their operations across Pakistan while a big number of them are on the brink of closure. The textile exports have witnessed a sharp decline and the industry has lost the due level playing field as well as export competitiveness. The exorbitant gas tariff has heavily burdened the industry with cross-subsidies diverted towards fertilizer/feedstock, domestic and power generation, said Balwani. “The caretaker government has surpassed the previous elected governments in raising the industrial energy (gas) tariff to 118 percent from August 2023 and adding 40 percent cost of RLNG, thus escalating the gas tariff to the historic high of 191 percent.

This appears to be a clear-cut indication that someone intends the closure of industries,” he added. Farooq Shekhani, President of Hyderabad Chamber of Small Industries, told WealthPK that the gas price hike would be devastating for the industries and the caretaker government has no justification to raise the gas price. The consumers have been burdened with Rs242 billion to appease the International Monetary Fund (IMF), he opined. He expressed concern over the government’s unwise moves to control the rising cost of utilities, which hindered the industrial wheel to move smoothly, enhance exports and earn valuable foreign exchange. He said the industries have started shutting down, which will ultimately lead to a decline in exports and foreign exchange as well as massive lay-offs. The gravity of situation demanded prudent decisions to support businesses and revive the economy.

Credit: Independent News Pakistan (INP)