Businessmen Group Chairman Zubair Motiwala has strongly urged Oil and Gas Regulatory Authority (OGRA) to reject the Estimated Revenue Requirement (ERR) petition submitted by Sui Southern Gas Company (SSGC) for fiscal year 2026-27, warning that any further increase in gas tariffs would cripple industries, damage exports and further weaken Pakistan’s economy.
Speaking at the public hearing on SSGC’s ERR petition held here in a local hotel on Monday, Chairman BMG demanded an immediate review of the entire tariff structure and called upon OGRA to stop burdening the industrial sector with the financial inefficiencies, theft losses and cross-subsidies of other sectors.
He emphasized that industries, which maintain nearly 98 percent recovery rates, should not be forced to subsidize domestic consumers, fertilizer manufacturers and high-loss regions.
He further demanded that SSGC be structurally divided into two separate operational entities or boards, one exclusively catering to industrial consumers and the other managing domestic and subsidized sectors, so that the actual financial performance and recovery efficiency of each segment could transparently be assessed. He maintained that if industrial consumers were managed separately, the industrial gas business would itself become commercially sustainable and capable of supporting lower tariffs through higher sales volumes and improved efficiency.
Zubair Motiwala also called for the immediate withdrawal of unjustified expenditure increases proposed in the petition, particularly the extraordinary escalation in electricity expenses, traveling costs and professional charges. He questioned the rationale behind projecting a 73 percent increase in electricity costs despite a substantial decline in industrial gas consumption, which had automatically reduced compressor operations and electricity usage.
Criticizing the exchange rate assumptions used in the petition, he stated that while the government had successfully stabilized the rupee at around Rs279-280 per dollar through consistent economic management, SSGC had arbitrarily projected an exchange rate of Rs287 per dollar to inflate revenue requirements. He questioned why previous exchange rate gains were never transparently adjusted in consumers’ favor despite earlier overestimations.
Chairman BMG stated that Pakistan’s industrial gas tariffs had become internationally uncompetitive, making it impossible for exporters to compete in global markets. Comparing regional energy prices, he pointed out that industrial gas in Pakistan was approximately US$14 per MMBTU compared to around US$9.82 in Bangladesh, US$12.18 in Vietnam, nearly US$6.5 in Indonesia and about US$6.75 in India.
He warned that exporters operating in international markets could not survive with energy costs significantly higher than competing economies. ‘Exports cannot grow if production costs remain uncompetitive’, he remarked, adding that Pakistan’s survival depended on increasing exports and earning foreign exchange, which was impossible under the prevailing energy pricing regime.
Referring to the severe decline in industrial gas consumption, he noted that consumption had fallen drastically from nearly 200 MMCFD to around 800 MMCFD as industries either shifted to alternative fuels or shut down operations altogether due to exorbitant tariffs. He stated that many industries were now relying on coal, rice husk, wood and other substitute fuels merely to remain operational.
Describing industry as the ‘golden goose’ of the economy, he cautioned that excessive financial burden on productive sectors would ultimately destroy the country’s industrial base and further reduce gas demand, thereby worsening SSGC’s own financial position.
Zubair Motiwala also criticized the continuation of cross-subsidization policies under which efficient industrial consumers were being forced to bear the burden of losses, theft and inefficiencies in other sectors. He observed that despite industries maintaining one of the highest recovery rates, they continued to face discriminatory pricing policies.
Expressing concern over Unaccounted for Gas (UFG) losses, he pointed out that although SSGC claimed to be investing heavily in UFG reduction measures, losses still remained substantially above the regulator’s benchmark. He argued that this contradiction itself reflected operational inefficiencies and weak management practices.
He further opposed SSGC’s demand seeking recovery of previously disallowed amounts, including Rs545 billion already determined by OGRA after due diligence. Reopening settled determinations, he said, would undermine the credibility and authority of the regulatory framework itself.
Chairman BMG also objected transferring operational losses from Balochistan and other high-loss areas onto industrial consumers, questioning the fairness of making compliant industries pay for inefficiencies outside their control.
While appreciating certain operational initiatives undertaken by SSGC, including time-based gas supply management and measures aimed at reducing UFG, he maintained that operational improvements could not justify imposing additional financial burden on industries already struggling for survival.
Concluding his remarks, Zubair Motiwala urged OGRA to reject the petition in its current form and formulate an industry-friendly energy pricing mechanism capable of supporting industrial growth, export competitiveness, employment generation and long-term economic sustainability.