Karachi Chamber of commerce and industry critical about criteria of enhancement of gas tariff

Karachi, June 30, 2012 (PPI-OT): Karachi Chamber of Commerce and Industry’s (KCCI) President Mian Abrar Ahmad, in a press statement, has stated that it was noted with surprise that gas tariffs have been enhanced in contrast to the OGRAs recommendation wherein OGRA has recommended for reduction in tariff across the board and OGRA has adopted the prescribed method WACOG (weighted average cost of gas) wherein the open market crude oil prices are the criteria for determination of the gas tariff and it is a common knowledge that oil prices in the world market drastically reduced from 135 to 140 dollars and gone below 80 dollar which is a huge reduction that comes to 40 percent, in all fairness, the tariff should have been revised downward at 40 percent.

President KCCI stated that to utter surprise tariffs has been enhanced by more than 10 percent. It is further surprising that CNG tariff has been reduced in real terms, one fails to understand that what is important? Is it the employment, maintenance of law and order and security, expanding the trade account, enhancing the exports, creation of more employment opportunities, elimination of current account deficit and trade account deficit and above all enhancement in collection of taxes as in our point of view taxes are nothing but the byproduct of a vibrant economy.

President KCCI stated that this singular step of enhancing the gas tariff would retard the exports from Pakistan and specially the value added sector of textile would suffer the severest blow as already Bangladesh gas tariff is lower by more than 50 percent to that of Pakistan. Another 10 percent difference, we apprehend, might not prove the last nail in the coffin! He was also of the opinion that utilities are never the tool for revenue generation and government must refrain from doing so.

He further commented on creating disparity between the two sectors and reducing the tariff for a sector which is considered to be the cause for today’s energy crisis and to enhance for a sector which is the backbone of Pakistan’s economy.

He strongly demanded immediate withdrawal of tariff enhanced to the industry and rather provide the relief to make the industry more competitive in the world market. The idea of imposing Gas Infrastructure Development Surcharge (GIDS) is also not accepted, he maintained.

For more information, contact:
M. Shafiq Baig
Public Relations Officer
Karachi Chamber of Commerce and Industry (KCCI)
Aiwan-e-Tijarat Road,
Shahrah-e-Liaquat, Karachi-74000
Tel: +9221 9921 8001 -09
Fax: +9221 9921 8010
Email: pro@kcci.com.pk, pro2@kcci.com.pk
Website: http://www.kcci.com.pk/