KCCI urges govt to re-evaluate its energy procurement & pricing strategies

Business Recorder

2 days ago

KARACHI: President Karachi Chamber of Commerce & Industry (KCCI), Muhammad Jawed Bilwani, has called upon the government to urgently re-evaluate its energy procurement and pricing strategies to safeguard Pakistan's industrial sector and support economic growth.
Bilwani emphasized the need to continue purchasing Regasified Liquefied Natural Gas (RLNG) under existing agreement with Qatar but suggested that it be sold to industries at a reduced rate. The pricing gap, he proposed, can be bridged by supplying indigenous gas to captive power plants at lower rates. This, in turn, would ensure sufficient gas supply to industries at affordable rates, enhance productivity, create employment opportunities and prove favourable for the economy.
Bilwani highlighted that the import of RLNG, via six vessels per month, costs the country approximately Rs50.5 billion monthly. He proposed that this gas be provided to industries at Rs40 billion, while the remaining Rs10.5 billion be offset through the supply of locally available lower-cost gas.
'The current energy pricing structure is unsustainable for our industries,' he said. 'With soaring energy tariffs, elevated taxes, and high interest rates, our industries cannot compete effectively on the international stage.'
He warned that suspending the supply of 400 million cubic feet per day (mmcfd) of indigenous gas to regions under the Sui Northern Gas Pipelines Limited (SNGPL), including Punjab and Khyber Pakhtunkhwa while relying more on expensive RLNG, poses a serious threat to the industrial sector and the national economy.
Bilwani stressed the urgent need to foster an enabling environment to promote industrial growth and enhance exports.
He noted that due to the sharp rise in gas tariffs, many industrialists have been forced to revert to biomass sources like rice husk, mustard, sunflower, maize waste, and even cow dung to generate steam, finding it more economical than using industrial gas connections.
'Pakistan currently has among the highest industrial gas rates globally,' Bilwani said. 'It's unfortunate that, to deal with load-shedding and erratic electricity supply, the government itself advised industrialists to invest in captive power plants.
Following this advice, businesses spent billions on gas generators, boilers for waste heat recovery, and chillers that utilized jacket water to produce free steam and cooling. All of these installations are now rendered ineffective and financially wasteful.'
Bilwani also criticized the government's over reliance on International Monetary Fund (IMF) conditions, stating that such policies are being used to justify decisions that severely harm the industrial base.
He urged for meaningful consultation with stakeholders to devise balanced, sustainable energy strategies that consider both fiscal constraints and industrial needs.
'We need a clear roadmap that prioritizes the viability of our industrial sector,' he asserted. 'It's time to move beyond temporary fixes and focus on long-term, strategic planning that ensures economic stability and global competitiveness.'
Bilwani concluded by stressing that expecting industries to compete internationally while being burdened with the most expensive energy, excessive taxes, and high interest rates is simply unrealistic.
'If the government or the Prime Minister wants us to compete globally, they must first provide a conducive environment,' he said. 'In the current scenario, I cannot understand how industries are expected to survive let alone thrive.'
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