Gas price hike plea given thumbs down

Industrial sector asks OGRA to reject SSGC's revenue requirement petition

KARACHI:

Businessmen Group Chairman Zubair Motiwala has urged the Oil and Gas Regulatory Authority (Ogra) to reject a petition submitted by Sui Southern Gas Company (SSGC) for its estimated revenue requirement (ERR) for fiscal year 2026-27, saying that any further increase in gas tariffs will cripple industries, damage exports and further weaken Pakistan's economy.

Speaking at a public hearing on the SSGC petition held in Karachi on Monday, he demanded an immediate review of the entire tariff structure and called on Ogra to stop burdening the industrial sector with the financial inefficiencies, losses and cross-subsidies of other sectors.

He emphasised that industries, which maintain nearly 98% recovery rates, should not be forced to subsidise domestic consumers, fertiliser manufacturers and high-loss regions.

He further demanded that SSGC be structurally divided into two separate operational entities or boards, one exclusively catering to industrial consumers and the other managing domestic and subsidised sectors, so that the actual financial performance and recovery efficiency of each segment could transparently be assessed.

He maintained that if industrial consumers were managed separately, the industrial gas business would itself become commercially sustainable and capable of supporting lower tariffs through higher sales volumes and improved efficiency.

Motiwala also called for the immediate withdrawal of unjustified expenditure increases proposed in the petition, particularly the extraordinary escalation in electricity expenses, travel costs and professional charges. He questioned the rationale behind projecting a 73% increase in electricity costs despite a substantial decline in industrial gas consumption, which had automatically reduced compressor operations and electricity use.

Criticising the exchange rate assumptions used in the petition, he stated that while the government had successfully stabilised the rupee at around Rs279-280 per dollar through consistent economic management, SSGC arbitrarily projected an exchange rate of Rs287 per dollar to inflate its revenue requirement.