Expressing deep concern and disappointment over the Federal Government’s decision to freeze gas tariffs for the next six months, Chairman Businessmen Group (BMG) Zubair Motiwala and President Karachi Chamber of Commerce and Industry (KCCI) Rehan Hanif stated that while the announcement has been projected as a relief measure, it falls far short of the expectations and urgent demands of the country’s already distressed industrial sector.

In a joint statement, Chairman BMG and President KCCI emphasized that during sustained and constructive negotiations with the government, the business community had consistently called for a substantial downward revision in gas tariffs to reduce the cost of doing business. Gas, they noted, remains one of the most critical inputs for industry, particularly for export-oriented sectors, and the Prime Minister himself has reiterated on multiple occasions that lowering energy costs is essential for industrial revival and export growth. Against this backdrop, merely freezing tariffs at already exorbitant levels cannot be termed relief.

They stated that gas tariffs in Pakistan remain excessively high compared to the actual cost of gas, causing serious financial strain on industries. The prevailing pricing structure has severely eroded industrial competitiveness, curtailed production, reduced exports, and forced several industrial units to either shut down or operate far below capacity. Instead of providing the long-awaited relief, the decision to maintain the status quo has effectively prolonged the pain being endured by the productive sectors of the economy.

Zubair Motiwala and Rehan Hanif stressed that it is now imperative for the government to move towards cost-based pricing. According to industry assessments and figures available with the Oil and Gas Regulatory Authority (OGRA), the actual cost of indigenous gas hovers around Rs1,800 per MMBTU, yet industries—particularly Captive Power Plants—are being charged an exorbitant rate of approximately Rs4,000 per MMBTU, which is wholly unjustifiable and economically damaging. Such inflated tariffs, they warned, are directly accelerating deindustrialization at a time when Pakistan urgently requires industrial expansion, employment generation, and enhanced foreign exchange earnings.

Furthermore, they pointed out that gas supplied to industries—especially Small and Medium Enterprises (SMEs) for heating and process-related purposes—is being billed at an excessively high rate of around Rs2,300 per MMBTU, a level that is entirely unsustainable for smaller businesses. As a direct consequence of these punitive tariffs, a large number of SMEs have already been forced to shut down their units, resulting in job losses, reduced economic activity, and further erosion of the country’s industrial base.

They raised a serious alarm over the unannounced increase in RLNG mix in gas supply to industries. While industries were earlier informed of a 10 percent RLNG mix, recent gas bills indicate this proportion has been increased to 20 percent, significantly raising gas costs. This unilateral increase, they said, is illogical and counterproductive, as RLNG is substantially more expensive than indigenous gas and further escalates input costs for manufacturers already struggling to survive.

Referring to the issue of rising circular debt in the gas sector, the Chairman of BMG and the President of KCCI categorically stated that if circular debt continues to increase, the government must objectively identify the sectors responsible for its escalation. Burdening industries, which are already paying disproportionately high tariffs and contributing to exports, employment, and revenue, is neither fair nor sustainable. Shifting inefficiencies onto the industrial sector will only deepen the economic crisis rather than resolve it.

They categorically rejected the notion that freezing gas tariffs would reduce the cost of doing business. On the contrary, they pointed out that the enhanced RLNG mix alone will further increase production costs, making Pakistani products even less competitive in regional and global markets. Without a meaningful reduction in energy prices, the objective of industrial revival will remain unattainable.