KCCI opposes Ogra’s gas price hike recommendation

KARACHI: The president of the Karachi Chamber of Commerce & Industry (KCCI) has strongly opposed the Oil and Gas Regulatory Authority’s (Ogra) recommendation to increase gas prices for Sui Southern Gas Company Limited (SSGCL), terming the move unjust and detrimental to industries and the public already burdened by high inflation and escalating energy costs.

KCCI President Zubair Motiwala criticised Ogra for ignoring key factors that could have justified a reduction in gas tariffs, such as declining interest rates and improvements in unaccounted-for gas (UFG) losses. “Interest rate hikes are usually cited as a reason for tariff increases, but with rates now declining, this has not been factored into the tariff decision. The reduction in UFG losses by SSGC further highlights the need to lower, not raise, gas prices,” he said.

Motiwala also highlighted unfulfilled promises by the government, including commitments from the Ministry of Petroleum to lower gas prices to support export sectors. He expressed concern that Ogra’s recommendations contradict these assurances, jeopardising the competitiveness of Pakistani industries in global markets.

He urged the prime minister to intervene and direct Ogra to reconsider its recommendation. “Industries are already paying the highest gas bills. If a tariff hike is unavoidable, its impact should be borne by other sectors, not by industries struggling to stay afloat,” he said.

The KCCI president also pointed to SSGC’s financial strain caused by supplying 200mmcfd of gas to Balochistan without revenue. “How can Ogra justify a price increase without treating this revenue loss separately in the tariff evaluation? Such discrepancies undermine the credibility of Ogra’s recommendations,” he remarked.

Motiwala warned that the proposed tariff increase -- particularly the 25.78 per cent hike for SSGC -- would have a devastating impact on manufacturing and exports. He added that the timing of the increase was especially harmful, as businesses and consumers are already grappling with rising costs. “It is disheartening that just as the economy shows signs of recovery, measures like these stifle growth and competitiveness,” he said.

He further expressed concern over the potential fallout for export-oriented industries, particularly those relying on gas-powered captive power plants (CPPs). “Cutting off gas to these plants would render significant investments futile and create uncertainty across the sector,” he cautioned. The KCCI reiterated its commitment to advocating for fair and sustainable energy policies, urging the government to ensure that industries critical to Pakistan’s economic recovery are not further burdened.