Karachi, The SITE Association of Industry (SAI) in Karachi has convened an emergent meeting to discuss the recent substantial hike in industrial gas tariffs, a change they argue renders local industries nonviable. The increase in tariffs is feared to lead to the closure of many industries, both export-oriented and general.
According to SITE Association of Industry (SAI), the leaders addressing the meeting expressed concern over the ability of industries to compete internationally, citing already high production costs that are exacerbated by the latest increase in gas tariffs. They pointed out that the SITE area, located at the tail-end of the Sui Southern Gas Company (SSGC) network, suffers from inadequate gas pressure despite the tariff hike. This has forced industrialists to resort to alternative fuels like wood and coal, leading to environmental compliance issues for exporting industries and contributing to deforestation.
The members highlighted the negative implications of this tariff increase, including potential factory shutdowns in Karachi, which could lead to increased unemployment and subsequent rise in law and order issues due to joblessness. The association also criticized the government’s subsidy policy, which they claim favors the fertilizer and domestic sectors over general and export-oriented industries. Despite raising these issues with government officials, including the Federal Energy Minister, the Finance Minister, and the Prime Minister, their concerns have reportedly remained unaddressed.
The meeting concluded with a demand for the government to implement the gas tariff of Rs1350 per million British thermal units (MMBTU) as determined by the Oil and Gas Regulatory Authority (OGRA) for industries. The industrialists at the meeting unanimously resolved to initiate continuous protests against the government's decision to significantly raise the industrial gas tariff. They argue that this increase, on top of already high manufacturing costs, has made their operations unviable and uncompetitive.