BMP warns against another hike of 31pc in gas tariffs
The Businessmen Panel (BMP) of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has warned the government of another hike in gas prices by up to 31%, as the gas companies have sought an increase of up to Rs194 per unit in their tariffs.
The chairman of the Businessmen Panel (BMP) Mian Anjum Nisar said that the cost of doing business has already been increased manifold, leading to constant decline in exports but the Sui Southern Gas Company and Sui Northern Gas Pipelines Limited are planning to put an additional revenue burden of about Rs94 billion on domestic as well as the industrial consumers, as they are planning to increase their tariffs, though the government has already raised gas prices by up to 190% in July this year under tough conditions of the $6 billion International Monetary Fund (IMF) loan programme.
Mian Anjum Nisar added that electricity prices were also increased by Rs1.50 per unit which is unfortunate.
He also condemned the government for increasing prices of three major petroleum products on 1st of Nov, which will cause an additional burden of about Rs700 million on consumers in this month. He said that it is unfortunate that besides the 17% GST, the government has more than doubled the rate of petroleum levy on HSD in recent months to Rs.21 per litre from Rs.8 per litre, while levy on petrol has also been increased by 50% to Rs.17.20 per litre from Rs.10 per litre. The government has also increased general sales tax on all petroleum products to the standard rate of 17% to generate additional revenue. Mian Anjum Nisar said that last year, the government had ended subsidy on gas prices and increased gas prices by up to 143 percent by creating six new slabs. Though the government at that time had claimed that it would not put a burden on domestic consumers as the increase in gas tariff mostly affected the commercial entities, the domestic consumers were also on the receiving end of the hike, He said that the BMP had been calling on the government since long for the introduction of much needed reforms in the energy sector but unfortunately all its appeals had fallen on deaf ears with the result of huge cut in country's economic growth.
He said that gas companies are only concerned with their profits disregarding the fact the increasing price of gas will reduce demand and increase the theft, besides stoking inflation and hitting production in the industrial sector, also damaging exports volumes.
It is to be noted that at present, the average prescribed price of SNGPL is Rs624.93 per Million British Thermal Unit (MMBTU) while the same for SSGC is Rs735.48 per MMBTU. However, SNGPL has proposed OGRA to set the average prescribed gas price at Rs818.95 per MMBTU.