Cabinet Approves Significant Gas Tariff Hike, Stirring Controversy

Critics Slam Decision as Business Community Voices Alarm Over Potential Industry Closures

Cabinet Approves Significant Gas Tariff Hike, Stirring Controversy

In a move that has sparked widespread debate and criticism, the federal cabinet of Pakistan has given the green light to a substantial increase in natural gas tariffs, amounting to as much as 67 percent.

The decision, effective as of February 1, has been attributed to the necessity of meeting revenue targets set for gas utilities in the current fiscal year.

Under the new tariff structure, consumers across various usage brackets will witness notable increases in their gas bills. For instance, consumers using up to 0.25 hundred cubic meters (hcm) will face a 66 percent hike, with the rate set at Rs200 per mmbtu. Similarly, those consuming up to 0.5hcm will see a 67 percent increase, with rates at Rs250/mmbtu.

However, the decision has not been without its detractors. The Hyderabad Chamber of Small Traders and Small Industry has vehemently criticized the move, denouncing it as disastrous for industries and questioning the moral justification of the caretaker federal government. Mohammad Farooq Shaikhani, President of the Chamber, highlighted the adverse impact on businesses and the general public, especially in light of the recent general election.

The concern extends to specific industries, such as Hyderabad's renowned glass bangle sector, which has already experienced significant closures and job losses due to previous gas price hikes and load shedding. The fear now is that further increases will lead to the closure of remaining factories, exacerbating unemployment and economic instability in the region.

Critics argue that such measures, aimed at fulfilling IMF conditions, risk driving more industries to the brink, potentially increasing street crimes and bankruptcies. They call upon future political leaders to reconsider such decisions, emphasizing the need to prioritize industrial growth and essential facilities over abrupt price escalations.

The move comes amidst a backdrop of broader economic challenges, prompting renewed calls for more sustainable and inclusive policies to navigate Pakistan's economic landscape.

Despite the criticisms, the caretaker government stands firm on its decision, emphasizing the necessity of meeting fiscal targets and obligations in a challenging economic environment.