KARACHI/ISLAMABAD: On Thursday, Karachi’s industrial community declared a strike scheduled for December 4 in protest against the recent massive surge in gas tariffs.
This increase in natural gas prices was announced by Pakistan on October 31, just before the country’s inaugural assessment for a $3 billion IMF bailout package.
Faisal Moiz Khan, President of the North Karachi Association of Trade and Industry (NKATI), and Javed Bilwani, the patron-in-chief of the Pakistan Hosiery Manufacturers & Exporters Association, highlighted in their joint statement that the current gas rates render industrial operations unsustainable.
They emphasized that the escalated gas prices have significantly escalated the cost of conducting business.
They further announced solidarity from industrialists in other regions of Sindh and Balochistan, confirming their participation in the strike slated for December 4.
Expressing disappointment, the leaders noted the absence of the Minister of Energy’s visit to Karachi despite prior assurances, illustrating a lack of attention towards addressing their concerns.
The substantial increase in gas tariffs has critically impacted export-based industries, rendering them unviable and less competitive in the global marketplace. This development is particularly concerning as the country urgently requires foreign exchange to manage burgeoning trade and current account deficits.
Earlier, in a decisive move, the caretaker government has opted to raise gas prices in January 2024, citing the surge in fuel usage during the approaching winter season. Interim Finance Minister Shamshad Akhtar conveyed this decision to Islamabad reporters, linking it to discussions about the International Monetary Fund (IMF) program.
During Wednesday’s announcement, the international lender and Pakistan reached a staff-level agreement, paving the way for a $700 million disbursement under the first review of a $3 billion standby arrangement, pending approval from the Fund’s Executive Board.
This marks another escalation in gas prices following the caretaker cabinet’s approval of a substantial increase last month—up to 3,900% in fixed monthly charges and 194% in consumer rates for natural gas.
With Pakistan facing an annual gas depletion of 8% to 9% from its own reserves, the caretaker government is actively seeking solutions. Bids for 10 onshore blocks are set to open this month, and plans are underway to invite bids for 24 offshore blocks in December, as disclosed by interim Power Minister Muhammad Ali on September 8.
Addressing concerns about potential sectoral taxes, Minister Akhtar clarified that no decision has been made yet, refuting media claims that the IMF urged taxation on real estate and retail.
Finance Minister emphasized the government’s primary focus on achieving the Federal Board of Revenue’s tax collection target of Rs 9,415. Any shortfall, she mentioned, would prompt consideration of additional measures.
The decision to defer a $1.5 billion international bond issuance until finalizing the IMF agreement was explained as a strategy to enhance the country’s ratings. Following the IMF’s successful review, the stock market and the rupee experienced notable gains, with the KSE-100 index closing at 57,397.02 points, up 716.96 from the previous day.
