KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has strongly appealed to Prime Minister Shehbaz Sharif to reject the Oil and Gas Regulatory Authority’s (OGRA) proposed increase in gas tariffs.
The recommendation, which suggests a significant hike in gas prices for Sui Southern Gas Company Limited (SSGCL), has been met with intense opposition from the KCCI, citing its detrimental impact on Pakistan’s industries and public already burdened by inflation and escalating energy costs.
KCCI President, Muhammad Tariq Bilwani, criticized OGRA’s proposal, arguing that it disregards the current economic realities and violates commitments made by the government to support the industrial sector. “Instead of reducing gas tariffs in line with lower interest rates and decreased unaccounted-for gas (UFG) losses, OGRA has chosen to recommend an unjustified increase. This decision is perplexing and detrimental,” he stated. Bilwani emphasized that SSGCL’s improved UFG figures and the central bank’s interest rate cuts provided ample grounds for a reduction in gas prices rather than a hike.
Bilwani further highlighted the contradiction between OGRA’s recommendations and the government’s earlier assurances of supporting the export sector by reducing energy costs. He noted that such measures undermine Pakistan’s ability to remain competitive in global markets and discourage industrial growth. “The proposed hike, particularly the 25.78% increase for SSGCL, will cripple export-oriented industries, particularly those relying on gas-powered Captive Power Plants (CPPs). These industries are pivotal to Pakistan’s economic recovery and global competitiveness,” he warned.
Addressing the financial woes of SSGCL, Bilwani pointed out that the provision of 200 MMCFD of gas to Balochistan without generating any revenue exacerbates the company’s problems. “OGRA must address these systemic issues instead of burdening industries and consumers with additional costs. It is unacceptable that gas theft and inefficiencies remain unaddressed while businesses are made to bear the consequences,” he added.
The KCCI president also urged the government to focus on structural reforms in the energy sector, including measures to curb gas theft and pilferage, rather than imposing burdensome tariffs.
On behalf of Karachi’s business community, Bilwani appealed to the Prime Minister to reject OGRA’s proposal outright and prioritize the protection of Pakistan’s economic and industrial interests. “The proposed hike is shortsighted and will only deepen the financial strain on industries and consumers, threatening Pakistan’s economic stability,” he concluded.