KARACHI: Leading figures from Karachi’s business community have strongly opposed the federal government’s decision to raise gas tariffs, warning that the move will further strain industries already grappling with high input costs and export challenges.
In a joint statement issued on Friday, Zubair Motiwala, Chairman of the Businessmen Group (BMG), and Muhammad Jawed Bilwani, President of the Karachi Chamber of Commerce and Industry (KCCI), denounced the Economic Coordination Committee (ECC)’s gas price hike as “illogical and unjustified” under current economic conditions.
Surplus RLNG Wasted, Say Business Leaders
The business leaders pointed out that despite a global decline in Brent crude prices, the Sui Northern Gas Pipelines Limited (SNGPL) system is dealing with a surplus of 300–400 million cubic feet per day (MMCFD) of imported re-gasified liquefied natural gas (RLNG). The gas remains unused due to its high cost — driven up further by taxes and levies — making it unaffordable for many power producers and industrial units.
“This is an inefficient use of national resources. Instead of passing the burden onto industries, the government should focus on fixing supply chain mismanagement and pricing inefficiencies,” they stated.
Impact on SMEs Could Be Devastating
Highlighting the broader economic implications, Motiwala and Bilwani noted that while only 80 to 100 independent power producers (IPPs) rely on gas, more than 8,000 small and medium enterprises (SMEs) depend on it to run their operations. They warned that any further increase in gas tariffs could cripple the SME sector, which plays a crucial role in Pakistan’s industrial and employment landscape.
They urged the government to consider a 20% reduction in the process gas tariff to support struggling SMEs and prevent mass shutdowns.
Ogra’s Recent Tariff Cut Ignored
The statement also referenced a May 20 decision by the Oil and Gas Regulatory Authority (Ogra), which approved a significant reduction of Rs103.95 per mmBtu in gas tariffs for Sui Southern Gas Company (SSGC), bringing the rate down to Rs1,658.56 per mmBtu. This revision was based on realistic cost estimates and falling global energy prices.
“It is contradictory for the ECC to hike tariffs while Ogra has acknowledged that a downward revision is warranted,” the business leaders said.
Already Burdened by Budgetary Measures
The KCCI and BMG chiefs further warned that industries are already under immense pressure due to aggressive taxation measures introduced in the federal budget. Any additional hike in gas prices, they said, would worsen the financial stress and hamper the productivity and competitiveness of Pakistani exports.
They urged the government to reconsider its decision and work with industry stakeholders to find a balanced approach that supports both energy sustainability and economic growth.
