Bad News for People, Gas prices hike

ARY NEWS

Bad News for People, Gas prices hike   #gaspricehike #bakhabarsavera #arynews

Transcript

00:00 Now, we have a news related to you all.

00:04 The Nigra government has increased the prices of gas after accepting the IMF conditions.

00:11 We are seeing that the traders and the industrialists have opposed the increase in the prices of gas.

00:19 The FPCI has warned the government that the increase in the prices of gas will create many sites,

00:27 many units and many production units will be shut down.

00:31 They have been saying this for the past two months.

00:35 Similarly, the industry can be shut down due to the increase in the prices of gas.

00:45 10 lakh people are already unemployed.

00:48 In these circumstances, increasing the prices of gas is a way to destroy the industry.

00:53 The government has written a letter to the government to stop this.

00:58 What are the other precautions?

01:00 We have a guest with us.

01:02 We have a guest with us.

01:04 We will talk to him.

01:05 We have invited the regional chairman of FPCI, Vice President Zakir Ijaz Qureshi.

01:10 Zakir sahib, good morning to Bakhawar Sawera.

01:13 I hope you are well.

01:14 Mr. Zaki, please tell us what is the situation and what alarming statistics have been released

01:24 that more industries can be shut down if the situation continues like this.

01:29 Mr. Faisal, thank you very much.

01:33 As you know, the large scale manufacturing industry, which is mostly related to export,

01:40 uses 500 mmcfd gas from SSGGL and SSGPL.

01:47 400 of this gas is used for capetic power and 100 is used for process.

01:53 This produces approximately 1600 megawatt electricity.

01:57 I would like to tell you that in October 2020, their tariff was 852 rupees mmbtu.

02:04 In February 2023, this was increased by 30% and it was reduced to 1100 mmbtu.

02:14 In the same year, in November 2023, two rates were divided for a process and a capetic power.

02:23 The rate of the process was increased by 90% and it was reduced to 2200.

02:28 The capetic power was reduced to 2400.

02:31 Very little time has passed in November 2023.

02:36 Yesterday, the EC meeting suggested that the process should not be increased,

02:41 but the capetic power should be increased from 2400 to 2950.

02:47 Mr. Faisal, I would like to tell you that the last increase in November 2023

02:54 has caused the shutdown of about 160 units of export related industries.

03:03 In one industry, at least 600 people have lost their jobs,

03:09 of which 100,000 have already become unemployed.

03:13 The increase is going to happen, but the cost is that the price of 240 units will not be competitive.

03:26 One explanation is that IMF conditions are also there,

03:31 and the other explanation is that it is a global phenomenon.

03:34 Then, the references are given to the region to see the situation there.

03:37 If we compare it with other countries in our region,

03:43 then at what rate are electricity and gas being provided to other sectors including textiles?

03:46 What is the difference in comparison with Pakistan?

03:48 Thank you very much, Sadat.

03:51 In India, the tariff on gas is 6.5 USD.

03:57 In Bangladesh, it is 7.5 USD.

04:00 In Vietnam, it is 9.8 USD.

04:03 The current rate in Pakistan is 12.6 USD.

04:08 Similarly, in electricity, Bangladesh is 8 USD,

04:13 Vietnam is 7.2 USD, India is 10.3 USD, and Pakistan is 16.57 USD.

04:22 You can compare it with the fact that Pakistan's export figures have improved for the past two months,

04:30 but if it is reversed again, our exports will be down.

04:34 Mr. Zaki, you are giving us a very staggering kind of statistics.

04:37 Not only will our exports be reversed, but there will be a storm of unemployment.

04:44 What is your suggestion in this situation?

04:47 Because just saying not to do this is not a solution.

04:50 What do you think is the solution?

04:52 Should we go to alternative sources of energy?

04:55 What is the situation you see?

04:57 Mr. Faisal, you have a very important point.

05:02 I think that the coming government and the SIFC should make a long-term policy,

05:13 a minimum of 10 years, in which basic things,

05:16 in which there is a tariff on electricity and gas,

05:19 and number three, the markup cost,

05:22 we will have to fix them somewhere.

05:25 Otherwise, we will not be able to compete in price,

05:30 in export and even in the domestic market.

05:33 Let me inform you that 50% of the industry is closed in the domestic market.

05:40 And our cost of production is increasing.

05:46 Because if a unit's capacity is to make 100 units and it is making 50,

05:51 then its overhead cost has increased a lot.

05:54 So, the domestic market is already under pressure.

05:57 And if we stop export, which we think is not reducing the markup,

06:03 because of which there is 22% plus cyber,

06:08 then the cost has increased by 24-25%.

06:11 So, where there are challenges,

06:13 even in the world, it is being reversed,

06:16 that the markup cost is being reduced.

06:19 And I would also like to say that if we look at February,

06:24 then our inflation has been around 12%.

06:27 So, my request to the SIFC and the government is to bring it up to 15%.

06:32 And similarly, in terms of energy…

06:34 So, you are so hopeful because a new government is going to be formed.

06:37 And then, of course, we are in an energy crisis.

06:40 They have to come and see a lot of things.

06:42 We are going with the stand-by agreement with IMF.

06:45 So, when you form a new government,

06:48 then you will have to go to another IMF program.

06:51 And, of course, when the conditions come,

06:53 then these are the sectors, these are the electricity tariffs,

06:55 these are the gas tariffs, in which all kinds of numbers are made by adding up.

06:59 So, what are your expectations from them?

07:02 Yes, Sadaf, for this, I would suggest to the government that

07:06 one is the issue of IMF.

07:08 Before that, the agreement that we have made with the IPPs,

07:11 the long-term agreement, how will you manage that?

07:14 The government that is going to come.

07:16 My first question is this.

07:17 IMF is a separate thing that we have already made an agreement with the IPPs.

07:21 Because of that, the cost of 45-46 units that we have,

07:25 how will the coming government manage that?

07:27 Number two, the subsidized area that the government has been giving for a long time,

07:31 my request is that across the board, the energy rates should be equal.

07:37 For example, domestic rates were given very low in the past,

07:41 and some other industries, specific industries, were given very low rates,

07:46 and the burden of that was borne by other industries.

07:49 So, I think that we should be equal across the board,

07:51 as we have just come to know that the SIFC has approved a 9 cent rate for electricity across the board.

07:59 So, I think that the government should apply this immediately,

08:03 and focus on consistent policies.

08:07 [NON-ENGLISH SPEECH]

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