Gas Price Hike Sparks Industry Backlash in Karachi

Karachi: Junaid Naqi, President of the Korangi Association of Trade and Industry (KATI), has voiced strong opposition to the federal government’s recent decision to increase gas prices for the industrial sector, bulk consumers, and the power sector, effective from July 1st. Naqi warns that the move could severely impact Pakistan’s faltering economy by raising production costs, affecting exports, and increasing unemployment.

Naqi highlighted the existing burden on industries due to rising electricity, fuel, and raw material costs. He emphasized that the new increase in gas tariffs could further strain key sectors such as textiles, food processing, iron and steel, chemicals, and fertilizers. These sectors, he said, rely heavily on gas as a raw material and will be directly impacted by the price hike.

Criticism also extended to the government’s decision to raise fixed gas charges for domestic consumers by 50%, a move Naqi believes will indirectly affect industries. He accused the government of using businesses as scapegoats by passing on financial burdens to the industrial sector.

The KATI President warned that the increased production costs would make Pakistani exports less competitive in the global market, potentially affecting foreign exchange reserves and slowing down economic progress. Naqi noted that independent power producers, who depend on gas for electricity generation, would face increased costs that would be passed on to the public and businesses.

Naqi criticized the government’s approach, arguing that Pakistan needs industry-friendly policies to sustain economic activity. He referred to OGRA’s approval of a 6.6% increase in gas tariffs for fiscal year 2025-26, which aims to help gas companies like SSGC recover substantial revenue targets.

Urging the government to reverse the gas price hike for industrial users, Naqi warned of potential shutdowns of production units, job losses, and further economic decline. He cautioned that without a policy reversal, protests would be unavoidable, emphasizing the need to support industry and protect Pakistan’s exports.