Pakistan has been losing major share of its market in Afghanistan to Iranian cement, as the high energy cost has made the cement more expensive. Rejecting the massive increase in gas and electricity rates, which had been notified for implementation from July under an agreement with the International Monetary Fund, the industry stakeholders said the cost of doing business continued to increase manifold, leading to constant decline in exports and high trade deficit.
The government had announced an increase in electricity prices by Rs1.50 per unit and gas prices by up to 168.36% last month, which was severely damaging the industry.
They said that in less than 40 days after increasing gas tariff by up to 200 per cent, the government has now hiked minimum gas charges by 39pc for almost all consumer categories. The minimum gas charges are payable by every consumer irrespective of consumption levels. This also means that even a closed premises having gas connection but zero consumption is required to pay this charge. The minimum rates for registered manufacturers or exporters and their captive powers, including textile, jute, carpets, leather, sports and surgical goods, have also been increased by 38.6pc to Rs28,060 per month from Rs20,232.
They said the cement industry is contributing its role in national exports in addition to providing jobs to thousands of workers. But, increased cost of doing business was hurting Industry which must be curtailed to get maximum share for Pakistan economy. They said that the devaluation of Pakistani rupee against the US dollar was already hurting the growth of the economy and cement industry.
They said that the cost of electricity and gas in Pakistan is already the highest in the region while additional duties on coal imports have nullified the lower cost of coal in the global markets. On the domestic front, high government levies have encouraged some unscrupulous elements to import under-invoiced Iranian cement, resulting in drop in domestic sale. They said that exports are down not only because of high cost of doing business but also due to the lax attitude of the regulators who are ignoring malpractices in imports.
The cement industry stakeholders urged the government to increase custom duty on import of clinker to support the local manufacturers, besides reducing cost of doing business in the country to encourage the local sale.