Pakistan Denim Manufacturers and Exporters Association, Karachi Chamber of Commerce and Industry (KCCI) and others have called for government intervention following the domestic gas tariff increases of November 1.
The government decision has been approved by the denim manufacturers based in Punjab who saw their gas tariff reduced. Earlier the Punjab based mills were charged much higher rates based on the import of liquid natural gas which was three times more expensive than domestic gas that was available to Sindh based denim producers only. Now the tariff is based on the average weighted price. This has substantially increased the tariff for Sindh based mills.
Their request by millers and associations from Sindh involves imposing reductions of 1,350 Pakistani rupees per one million British thermal unit (MMBtu), which KCCI president, Iftikhar Ahmed Sheikh, suggested would be more “acceptable”.
“The unwise move to raise gas tariffs will badly hit value-added exports and industrialists will have no choice but to revert to exporting raw materials,” he commented, “which would subsequently provide a perfect opportunity for competitors to take over Pakistan’s export share [relatively] easily”.
Collectively, the trade body representatives said they would be forced to intensify protest efforts if no announcement is made beyond the first week of December.