Industrial leaders today strongly condemned the government’s decision to freeze gas tariffs, asserting that the policy prolongs severe economic distress and accelerates deindustrialisation by forcing manufacturers to pay more than double the actual cost of gas.
In a joint statement, Chairman of the Businessmen Group (BMG), Zubair Motiwala, and President of the Karachi Chamber of Commerce and Industry (KCCI), Rehan Hanif, expressed profound disappointment, characterising the six-month tariff freeze as a measure that falls drastically short of the industrial sector”s urgent need for a substantial price reduction.
They emphasised that the business community had consistently called for a significant downward revision during negotiations, noting the Prime Minister’s own acknowledgements that lower energy costs are vital for industrial revival. They argued that merely maintaining tariffs at their current exorbitant levels cannot be considered a relief.
The leaders highlighted a stark disparity, stating that while the authentic cost of indigenous gas is approximately Rs1,800 per MMBTU, industries, particularly Captive Power Plants, are being charged an “unjustifiable and economically damaging” rate of around Rs4,000 per MMBTU.
This pricing structure, they explained, has severely eroded industrial competitiveness, leading to curtailed production, diminished exports, and forcing numerous units to either cease operations or function well below their capacity.
The burden on Small and Medium Enterprises (SMEs) was also noted, with gas for heating and processing being billed at an unsustainable rate of Rs2,300 per MMBTU. This has directly resulted in the closure of many smaller businesses, contributing to job losses and a weakening of the country”s industrial foundation.
A serious alarm was raised over an unannounced increase in the Regasified Liquefied Natural Gas (RLNG) mix in the supply. Business leaders stated that while industries were previously notified of a 10 per cent RLNG component, recent bills reflect this has been raised to 20 per cent, a unilateral move that significantly escalates input costs as RLNG is considerably more expensive.
Addressing the sector”s rising circular debt, Motiwala and Hanif asserted that the government must identify the sectors responsible rather than unfairly burdening industries that are already contributing to exports, employment, and revenue through disproportionately high tariffs.
They categorically rejected the idea that the freeze would lower the cost of doing business, pointing out that the enhanced RLNG mix alone will further inflate production expenses, making Pakistani goods less competitive in regional and global markets.
Concluding their statement, the Chairman BMG and President KCCI urged the government to immediately revisit its gas pricing policy, rationalise tariffs in line with actual costs, and reverse the unjustified increase in the RLNG mix. They stressed that a sustainable economic recovery is only possible if industries can operate competitively without being crippled by unjust energy prices.