KARACHI: Chairman of the Businessmen Group (BMG) Zubair Motiwala and President of the Karachi Chamber of Commerce and Industry (KCCI) Muhammad Jawed Bilwani have strongly opposed the Economic Coordination Committee’s (ECC) decision to raise gas tariffs, calling the move illogical and damaging amid soaring input costs and export pressures.

In a joint statement issued on Friday, the business leaders described the move as unjustified, given the prevailing energy market conditions. They noted that international Brent crude prices have declined, and the SNGPL system is already grappling with a surplus of imported re-gasified liquefied natural gas (RLNG), with an estimated 300-400 million cubic feet per day (MMCFD) going unutilised.

The surplus has arisen mainly because power producers and captive units are unwilling to purchase RLNG due to its high cost, which is further inflated by heavy taxes and levies. As a result, a significant portion of this imported gas remains unused, leading to inefficient utilisation of national energy resources.

They argued that instead of burdening the industrial sector, the government should focus on improving gas supply chain management and rationalising pricing structures. While only 80-100 independent power producers (IPPs) utilise gas for industrial processes, over 8,000 small and medium enterprises (SMEs) rely on the same resource. A tariff hike, they warned, would further destabilise the SME sector, which remains vital to Pakistan’s economic framework.

Instead of increasing the gas tariff, they suggested that a more pragmatic approach would be to reduce the process gas tariff by at least 20pc. This would allow SMEs to continue operations and play a productive role in the national economy.

Warn of blow to SMEs and exports

They further highlighted that the business community is already reeling from the stringent taxation measures introduced in the federal budget, and any additional cost in the form of higher gas prices would exacerbate financial stress across industries.

They cited the Oil and Gas Regulatory Authority’s (Ogra) decision on May 20, which approved a substantial reduction in gas tariffs for Sui Southern Gas Company (SSGC) by Rs103.95 per mmBtu, revising the rate down to approximately Rs1,658.56 per mmBtu. This reduction, they said, was based on realistic cost assessments and declining global fuel prices.

Published in Dawn, June 28th, 2025