SITE Association of Industry condemns proposed hike in gas prices through UFG adjustments with retrospective effect from 2012-13

Karachi, March 13, 2018 (PPI-OT): SITE Association of Industry has condemned the reports appearing in the Press that the government has decided in principle to increase gas prices by 5-7 per cent to cover losses with retrospective effect from 2012-13. Protesting the proposed government’s decision, Association President, Muhammad Jawed Bilwani said that the increment in gas prices is not acceptable by making past adjustments in system losses commonly called Unaccounted For Gas (UFG) since 2012-13.

Mr. Bilwani stressed the need to introduce better gas management strategy rather to make the UFG adjustments since 2012-13. In Pakistan, the percentage of UFG adjustments is the highest in the world i.e. 14% in Pakistan while in the rest of the world it is merely 1 to 2%. How can the federal government make UFG adjustments with retrospective effect when the exporters had fulfilled their commitments with the buyers as per the then gas tariff applicable in 2012-13.

SITE Association’s President, Mr. Bilwani further said that before taking any decision, the Government must examine the current energy cost of manufacturing sector compared to our competitors in the world market and must compare our arch rival Bangladesh where the prices are more than 50% below than Pakistan. Any increase whether retrospective or prospective would actually prove to be the last nail in the coffin, he said.

The industry is already having problems in competing with Bangladesh and figures of exports of Bangladesh touch 34 Billion US Dollars whereas we roam around 10 Billion US Dollars. We are unable to convert our cotton crop into the value-added commodity because the cost of manufacturing is higher than our competitors. Government must think twice before even considering any enhancement in gas tariff for manufacturing sector other than bringing down the tariff for the manufacturing sector, Mr. Bilwani remarked.

Mr. Bilwani also reminded the Prime Minister of Pakistan for the long-awaited demand of the Industry to abolish cross-subsidization on export-oriented sector and segregation of the same in the tariff category. President, SITE Association of Industry, Mr. Bilwani demanded that the government should introduce reforms in the gas sector by providing gas through pipelines only to the industrial zones instead of domestic and commercial consumers who may be provided gas in cylinders.

According to Mr. Bilwani, both the gas utilities – SSGCL and SNGPL should reduce their non-developing expenditures and bring the gas prices downward to flourish the suffering industry. He demanded from the government that all the industrial associations should be taken into confidence regarding any matter relating to the gas.

For more information, contact:
Secretary General
S.I.T.E. Association of Industry
H-16, Textile Avenue, SITE, Karachi
Pakistan
Tel: +92-21-32562883, +92-21-32560705
Fax: +92-21-32560704
E-mail: site@site-association.org
Website: www.site-association.org