KARACHI: Business leaders have strongly opposed the Sui Southern Gas Company’s (SSGC) petition to the Oil and Gas Regulatory Authority (Ogra) seeking a substantial increase in gas prices for the next fiscal year and urged the regulator to reject the proposal in the interest of the economy and industrial sustainability.

In a statement, Businessmen Group (BMG) Chairman Zubair Motiwala and Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Rehan Hanif expressed concern that the effective hike could reach 286 per cent when accumulated shortfalls of over Rs545 billion are incorporated.

They said that this would push the prescribed gas price to approximately Rs6,855 per million British thermal units (mmBtu) and raise the total revenue requirement to around Rs1.28 trillion.

They termed this demand entirely uncalled for and unjustified, noting that even on a standalone basis, the SSGC has sought a steep 121pc increase in prescribed prices to about Rs 3,935 per mmBtu, which is disproportionately higher than the 21pc rise requested by the Sui Northern Gas Pipelines Limited (SNGPL).

Warns effective increase may reach 286pc with accumulated shortfalls

They emphasised that the petition effectively converts gas tariffs into a mechanism for recovering historical financial inefficiencies rather than reflecting the actual cost of service. Gas throughput has declined by 9.4pc, yet operating expenses have surged by more than 108pc, indicating serious lapses in cost control and operational efficiency.

Embedding a cumulative revenue shortfall of nearly Rs956bn into current tariffs places an unfair burden on existing consumers, particularly the industrial sector, which is already under stress.

The KCCI leadership also objected to the inclusion of Rs312bn as interest on Gas Development Surcharge (GDS) receivables, stating that this represents a financial dispute between SSGC and the federal government and should not be transferred to consumers who have already paid the surcharge.

They also rejected the inclusion of Rs16.35bn as Balochistan revenue shortfall adjustment and Rs2.3bn for LPG air mix projects, asserting that these are policy-related costs that must be borne by the government through the national budget rather than imposed on industrial consumers.

They stated that both SSGC and SNGPL must first transparently identify and address the root causes of their financial deficits rather than relying on steep tariff increases.

The core issue is the sharp decline in industrial gas consumption which has dropped by nearly 50pc due to unviable pricing. At the same time, high unaccounted-for-gas (UFG) losses, including theft, leakages and inefficiencies, particularly in the domestic segment, continue to persist at elevated levels, while domestic consumption remains largely unchanged due to heavy subsidies.

Published in Dawn, May 3rd, 2026