ISLAMABAD: Islamabad Chamber of Commerce and Industry (ICCI) has called upon the government to withdraw the up to 67 percent hike in natural gas tariff and increase in tax rates on petroleum products as these measures would further increase cost of doing business and create additional problems for trade and industry.
Muzzamil Hussain Sabri, President, ICCI said that government has increased gas prices for industry, power and fertilizer sectors by 23 percent and for commercial consumers by around 10 percent, which is highest increase in recent history. He said these measures would lead to hefty rise in production cost, make indigenous products very uncompetitive in international market and badly affect exports causing harmful consequences for the overall economy.
He said industry was already paying high rate of Gas Infrastructure Development Cess and additional hike in gas tariff as well as taxes on POL products would make the survival of industry unsustainable and badly discourage new investment in the country. He said the new increase would take the cost of gas for industry from $0.96 per MMBTU to $6.72 per MMBTU, which is not viable at a time when the trade and industry was facing serious problems of loadshedding and other unfavorable factors.
Muzzamil Sabri said the recent hike in gas tariff would put Pakistan in a highly disadvantageous position compared to its competitors in exports market as the gas tariff in our country are more than 80 percent from Sri Lanka, more than 40 percent India and around 55 percent Vietnam. He questioned how Pakistan could compete in the exports market with such huge difference in input cost compared to other countries.
He said oil prices in the international market have come down to a record low level and OGRA had recommended up to 12 percent cut in the price of POL products, but it is very unfortunate that government increased tax rates on petroleum products to allow only 3.6 to 5 percent cut in petroleum prices. He said whenever the oil prices went up in international market, government did not waste time to pass on its full impact to the consumers, but whenever, these prices went down, government was found hesitant to transfer its full benefit to the consumers, which is unfair.
