Karachi Chamber of Commerce and Industry (KCCI) leadership today vehemently denounced a proposed increase in gas tariffs for industrial consumers, calling it illogical and damaging to Pakistan’s struggling industrial sector.
Chairman Businessmen Group (BMG) Zubair Motiwala and KCCI President Muhammad Jawed Bilwani, in a joint statement, argued that the proposal contradicts current energy market realities, particularly the declining international Brent crude prices and the surplus of unutilized imported RLNG in the Sui Northern Gas Pipelines Limited (SNGPL) system.
They argued that the surplus, estimated at 300 to 400 Million Cubic Feet per Day (MMCFD), stems from the power and captive sectors” reluctance to buy RLNG at high rates due to heavy taxes and levies. Instead of burdening industries, they contend, the government should focus on improving gas supply management and rationalizing pricing. Motiwala and Bilwani highlighted that while a small number of Independent Power Producers (IPPs) utilize process gas, thousands of Small and Medium Enterprises (SMEs) also rely on it. A tariff increase would severely impact this vital sector. They suggested a 20 percent reduction in process gas tariffs to support SMEs. Adding to the business community”s existing tax burden through the recent budget, a tariff increase would further exacerbate their challenges, they said. Given the surplus indigenous gas, they recommended offering it at reduced rates to stimulate industrial consumption and economic expansion.
The KCCI leaders cited OGRA”s May 20, 2025 decision, which approved a substantial reduction in gas tariffs for Sui Southern Gas Company (SSGC), questioning the government”s justification for a hike for industrial consumers when the regulator itself has acknowledged the need for a reduction. They argued that such inconsistencies undermine industry confidence. They further noted that OGRA’s determined price for SNGPL is still lower than the proposed hike and that petitioners during OGRA’s hearing had pointed to a projected RLNG surplus and questioned the Brent crude pricing assumptions used in OGRA”s calculations.
Motiwala and Bilwani warned that raising gas tariffs would severely affect industrial activity, productivity, and exports, leading to increased inflation, unemployment, and discouraged investment. They stressed that the industry is already grappling with rising electricity costs, currency instability, and declining demand.
They urged the government and the Economic Coordination Committee (ECC) to withdraw the proposal and reassess the gas pricing mechanism, emphasizing the need for costreflective, regionally competitive pricing aligned with national economic goals. They stated that the KCCI insists on supporting the industrial sector for economic recovery and rejects burdening it with inefficiencies elsewhere.