President of Korangi Association of Trade and Industry (KATI), Junaid Naqi, issued a stern warning about the potential economic fallout from the government’s decision to increase gas prices for industrial, power sector, and bulk consumers from July 1st. Naqi termed the move “devastating” for the industrial sector, already reeling under the pressure of rising electricity, fuel, and raw material costs.
The increased cost of this essential industrial sector input will severely impact sectors like textile, food processing, iron and steel, chemicals, and fertilizers. A 50% increase in fixed charges for residential gas consumers will also indirectly burden industries. Naqi criticized the Economic Coordination Committee (ECC)’s decision, accusing the government of making industrialists a “scapegoat.”
The gas price hike threatens to render Pakistani products uncompetitive in international markets, impacting foreign exchange reserves and hindering economic growth. The increased cost of power generation for Independent Power Producers (IPPs) will further burden consumers, small businesses, and industrial operations.
Naqi argued that instead of implementing industry-friendly policies, the government’s actions are crippling the sector. The Oil and Gas Regulatory Authority (OGRA) approved a 6.6% gas price increase for FY 2025-26, aiming to meet an Rs. 890 billion revenue target for the two major gas distribution companies, including SSGC Karachi’s target of Rs. 354 billion, placing an unfair financial strain on the industrial sector.
Citing potential job losses and wider economic downturn, KATI demanded an immediate reversal of the gas price hike for industrial consumers. Naqi hinted at possible protests if the government fails to address their demands. He emphasized the crucial role of industries in the national economy, stating that supporting them, rather than burdening them to achieve revenue targets, is essential.