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The right to strike

The right to strike

PHMA Zonal Chairman Abdul Jabbar Gajiani Chair welcomed the General Body Members (Exporters/ indirect Exporters) and invited the attention to the one-point agenda item i.e. to consider taking up the matter of historic unprecedented and highest increase in the industrial gas tariff affecting and making industries unviable to operate and devise future line of action to get relief for industry. He requested PHMA Patron In-Chief Muhammad Jawed Bilwani to brief the House about the efforts of PHMA in this regard.

Patron In-Chief, Muhammad Jawed Bilwani apprised that the Association had taken up the matter with the high-ups in the government. Various meetings were held in Islamabad and Karachi with the Federal Energy Minister, Federal Finance Minister and concern of the SSGCL-linked export-oriented industries were also communicated to the Prime Minister.

Terming the recent hike of industrial gas tariff “unacceptable” and “unviable”, Mr Jawd Bilwani voiced that the OGRA determined the industrial gas tariff Rs.1350 MMBTU, however, the Energy Ministry has acted one-sidedly without consultation with the stakeholder while Association has further increased industrial gas tariff 100% to 130% on which industries cannot operate.

The export-industries see this historic highest and unprecedented increase very harsh and they have demanded fair industrial gas tariff of Rs. 1350 per MMBTU failing which a huge number of export industries will be closed. The industries of Karachi have rejected the exorbitant increase in gas tariff due to burdening of cross-subsidies given to fertilizers and domestic sector, which they principally do not deserve. The industries have never received any subsidy given by government for gas tariff and were rather remain burdened with cross-subsidies. The SSGCL-linked industries have demanded fair gas tariff of Rs 1350 per MMBTU as determined by OGRA which is the 100% cost of gas and have urged the Government to bear itself the subsidy given to fertilizers and domestic sectors.

Mr Jawed Bilwani highlighted that this unwise and ill-advised decision of the government has made the export-oriented industries unviable and uncompetitive in international markets without realising that in these trying and testing time when the country direly needs foreign exchange to control trade deficit and current account deficit, the insensible move by the government will shatter the exports and will lead to huge closure of industries, lay-offs creating huge retrenchment of labour which might cause increase in street crimes and can also lead to bankruptcies of manufacturing units. He added that the stakeholder Associations and Karachi Chamber have given repeatedly three appeals in press (November 6, 7 and 8, 2023) apprising the government about the situation and circumstances which all went deaf on the ears of the Government.

Mr Jawed Bilwani focused that the industries of Karachi have appealed the government to intervene and revisit the decision in the national interest to save and sustain industry from complete collapse and export sabotage. Export markets once lost cannot be easily recaptured. The government shall be responsible for all the adverse and deadly affects on the industries of Karachi.

Thereafter, the PHMA General Body members endorsed the submissions of Patron In-Chief Mr Muhammad Jawed Bilwani and unanimously resolved that PHMA as well as all the stakeholders Associations and Karachi Chamber of Commerce & Industry (KCCI) must strongly take up the matter with all concerned in the Government. The export-industries and indirect exporters are not in a position to bear and absorb this exorbitant increase in industrial gas tariff.

One member stated that the industries of Karachi are already burdened with other additional cost heavily impacting the cost of manufacturing like costly water tariff, additional cost to take out safety and security measures in view of precarious law and order situation.

Mostly the SMEs industries cannot afford to opt for alternate fuels owing to lack of space as majority of them are vertical units, another member added.

A member articulated that in presence of huge hike in gas tariff, the SSGCL is demanding further an additional increase of 50% to supply gas in four months of winter tariff without any assurance whether the SSGCL will be in a position to supply 100% uninterrupted gas supply with required pressure. Also there will be two weekly gas holidays. In such scenario, the industries cannot operate and will shutdown.

One member expressed reservations that the government never gave any subsidy to the industries in the past and the industrial tariff was always on higher side while on the other hand fertiliser companies getting subsidies are earning huge profits and their balance-sheets are self-explanatory. Why the Government is providing subsidy to fertilizer company who are enjoying huge profits. Should not the fertiliser sector be applied the tariff determined by OGRA? Why Government is supplying gas to fertiliser companies on very low tariff? Similarly, in domestic sector, subsidy is availed by the persons having luxury lifestyle living in posh-areas who do not deserve this, but only the underprivileged class. Whether the affluent class living in posh areas of DHA in Karachi in more than 2000 square-yards bungalows deserve the subsidy? Should not the Government apply the tariff of Rs 1350 MMBTU determined by OGRA to both fertiliser and domestic sectors?

Another member exporter expressed concern that the export-industries are fearing that their export business will be lost upto 70 to 80 per cent if the government is unwilling to revisit decision. The International Buyers are not willing to enhance rates as other competing countries are offering even lesser rates to them. It appears that if the situation prevails, the export industries will even deprive of remaining 20 to 30 per cent business and will be completely closed. The complete responsibility of industrial closure and loss of export shall be on the part of government.

The General Body members noted that other Associations are also considering to call their General Body Meetings on the agenda. They asserted upon the need of joint efforts by the stakeholder Associations and Karachi Chamber in this regard to take up this most burning important issue with the Government for the sake of survival of industries.

The General Body Members urged the Association to go for protest, place protest banners all over the city, burn the export-orders given by foreign buyers, opt for continuous agitation and also observe “NO EXPORT DAYS” till the government takes serious notice and calls the industries of Karachi taking onboard to revisit the matter of exorbitant and unprecedented increase in industrial gas tariff for SSGCL-linked industries.

“Unanimously resolved that the industries of Karachi (SSGCL-linked) will go for continuous protest against the government on this unwise decision to exorbitantly increase the industrial gas tariff which industries cannot bear and absorb being already heavily burdened with highest cost of manufacturing which has made them unviable and uncompetitive to operate. The industries will continuously protest, place banners, burn the export-orders and will also observe frequent “no export days” till the government accords serious attention to the industries of Karachi and takes their representatives on board to revisit the decision and introduce and implement fair industrial gas tariff.”

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