LAHORE    -  Pakistan Industrial and Traders Associations Front (PIAF) has rejected the massive increase in gas and electricity rates, which has now been notified for implementation from Monday, July 01 (the first day of new fiscal year) under an agreement with the International Monetary Fund after approval by the federal cabinet.

PIAF former chairman Irfan Iqbal Sheikh said the cost of doing business has already increased manifold, leading to constant decline in exports and high trade deficit. The government has announced an increase in electricity prices by Rs1.50 per unit and gas prices by up to 168.36%, which would severely damage the industry.

According to the notification, the government has increased the price of gas to be used for fertilizer sector by 62% while 31% increase has been made in the price of gas to be used as fuel by zero-rated industry, general industry, power, cement and captive power plants, CNG stations and commercial consumers, putting an additional burden of about Rs397 billion during new fiscal year.

PIAF former chairman said that the government at last exploded the much awaited gas bomb by issuing the notification with rise in gas price for domestic consumers by 16-197 percent and 31 percent for industrial, commercial, power and CNG sector.

The electricity tariff increase of Rs1.50 per unit will also be effective from Monday. The government under IMF commitment is to enforce new increase in gas and electricity tariff from July 1 and will report it in IMF executive board meeting that is to meet on July 3, 2019, which is unfortunate for the national economy of Pakistan.

Irfan Iqbal said that it is unfortunate that the decision to seek an increase in gas tariffs came at a time when Pakistani rupee has taken a plunge in open and interbank markets also under a deal between the International Monetary Fund (IMF) and the federal government. He said the value-added industry is contributing to its role in national exports in addition to providing jobs to millions of workers. But, increased cost of doing business was hurting Industry which must be curtailed to get maximum share for Pakistan economy.

He said that the devaluation of Pakistani rupee against the US dollar was already hurting the growth of the economy and industry. PIAF chairman Mian Nauman Kabeer said that last year, the government had ended subsidy on gas prices and increased gas prices by up to 143 per cent by creating six new slabs.

Though the government at that time had claimed that it would not put a burden on domestic consumers as the increase in gas tariff mostly affected the commercial entities, the domestic consumers were also on the receiving end of the hike, he said. He said it was not only the economy that had been facing a meltdown-like situation but the entire country had been in the grip of multiple challenges.

Mian Nauman Kabeer said that PIAF had been calling on the government since long for the introduction of much needed reforms in the energy sector but unfortunately all its appeals had fallen on deaf ears with the result of huge cut in country’s economic growth.