Islamabad: Reacting to the increase in gas prices, the Pakistan Business Council (PBC) has said that providing expensive gas to industries will make it impossible to achieve the Prime Minister’s target of taking exports to $60 billion.
In a letter written to the Prime Minister yesterday, the PBC has taken the position that doubling the price of gas for captive power plants will make the industry unable to compete in the global market, and thus it will not be possible to achieve the Prime Minister’s target of taking exports to $60 billion by 2027.
The letter further states that tariffs for manufacturers in Pakistan are already high, electricity is being provided to industries in Pakistan at 17 cents per unit, while in India this price is 6, in Vietnam 8 and in Bangladesh 9 to 10 cents per unit, more than 50 percent of Pakistan’s exports depend on gas-fired captive power plants.
It should be noted that the government has increased the price of gas for captive power plants by following the IMF conditions. The IMF had initially demanded complete disconnection of gas supply to captive power plants that did not pay the full price of imported LNG, but then the government renegotiated with the IMF and agreed that the gas supply would not be disconnected, but the price of gas would be increased.
The Pakistan Business Council has also said in its letter that after the US imposed tariffs on Chinese products, Pakistani exports will not benefit from expensive gas, while our rival countries will take advantage of this situation. While increasing the price of gas will not achieve the goal of transferring all industries to the national grid, this will increase the use of alternative sources, industries will prefer to obtain electricity from solar and other sources, which will result in a large foreign exchange loss for obtaining solar energy.
