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PIAF opposes gov decision to remove subsidy on gas for industry

Lahore, NOV 13 /DNA/ – The Pakistan Industrial and Traders Association Front (PIAF) has demanded the govt to prioritize the whole industry in energy supply at competitive rates on the patron of regional countries of India, China and Bangladesh, as the government has increased the average power tariff by over 40 percent during the last three years followed by the proposed hike in gas rates by withdrawing subsidy for the industry. 

PIAF senior vice chairman Nasir Hameed and vice chairman Javed Siddiqi observed that the increase in power and fuel prices will increase the cost of production for the industrial section which in turn will impact the ease of doing business and exports. 

Nasir Hameed also criticized the government’s move of increasing petroleum levy on oil products, cutting relief for the industry of billions of rupees. He said that oil prices at international level have not changed for the last one month but the government has not passed on this benefit to the consumers as the government has raised the petroleum product price for the fourth consecutive time in two months’ period, lifting it by more than Rs29 per litter to almost Rs146 per litre, as the authorities hiked the oil prices by Rs4.50 on Sept 16, then by Rs5.50 on Oct 1, again by Rs10.49 per litter on Oct 16, and now by Rs8 on Nov 5, 2021. It is unfortunate that the authorities had reduced the petroleum rates just by Rs1.50 two months back on Sept 1, 2021, he added. When the rates go upward government makes OGRA responsible for this hike and refuse to interfere, he argued. 

He said that PIAF fully opposes this irrational move of the government to withdraw subsidy on supply of gas to the export industry under tariff rationalization plan. He pointed out that the government had announced to increase electricity base tariff by Rs 1.39 per unit across the country from November, while it had already enhanced the base power tariff by Rs 1.95 per unit in January 2021 along with quarterly and monthly electricity price hike under fuel adjustment formulas, totaling the power price hike to over Rs5 per unit. He said that the NEPRA has allowed an increase of Rs1.65 per unit in power tariff, under quarterly adjustments, which will empower the distribution companies to collect Rs173 billion from consumers in the next one year.  

PIAF vice chairman Javed Siddiqi said the decision would put another burden of Rs168 billion on the consumers during current fiscal year. The revision would increase the average base power tariff, excluding various taxes, surcharges and duties etc, from Rs13.97 per unit at present to Rs15.36 per unit in total. 

Javed Siddiqi said the capacity payments to inefficient power plants, extension of agreements with 1994 power policies, inefficient transmission system are all imprudent costs, which can’t be passed on to consumer. 

He requested the government to keep focus on the industry which can generate foreign exchange, contribute to local taxes and generate employment, he added. He said that govt in a meeting with the stakeholders had decided that gas supply will be supplied to the industrial units as priority number one at the competitive prices but the decision does not seem to be implemented now.  

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