The Pakistani Business Council (PBC) has warned that the aim of the government to achieve $ 60 billion of exports by 2027 may not be fulfilled after a sharp increase in gas prices for captive power plants (CPPS).
The government raised gas prices for CPPS through a presidential decree issued on Sunday, which increased the cost from 2,400 rupees per million British thermal units (MMBTU), or $ 8.8, to 4,200 rupees per mMBTU, or $ 15, once all fees are applied.
In a letter to Prime Minister Shaybaz Sharif, the CEO of PBC EHSAN Malik said that the high cost of gas will affect local exports and manufacturing. He pointed out that at a price of $ 15 per MMBTU, the price will be more than twice the imposition of CPPS fees in Bangladesh and the global price of liquefied liquefied liquefied (RLNG) can exceed at that time.
The Economic Coordination Committee (ECC) increased from the gas prices for CPPS by 18 % last week, and the government imposed a special tax of up to 20 % in four stages, ending in August 2025. The first stage, starting from Sunday, imposed 5 % tax, with the second stage Specified for the month of July.
More than 50 % of Pakistan’s export volume is produced in plants using captive energy fed by gas. PBC reported that the industrial electricity tariff in Pakistan is 17 cents per kilowatt hour, compared to 6 to 8 cents in India, Vietnam and 9 to 10 cents in Bangladesh.
PBC referred to the export goal announced by the Prime Minister on July 23, 2024, noting that an 113 % increase from the International Monetary Fund (IMF) expected 37.2 billion dollars for the fiscal year 24 requires additional measures. The council previously expressed its concerns about the goal defining the process, highlighting the lack of consultation with the exporters, high energy costs, and the need to invest in diversification of export.
The increase in gas prices follows the United States, which imposes a tariff on imports from China. PBC reported that high energy costs may prevent Pakistan from benefiting from requests transfer operations.
PBC also raised concerns about the transfer of industries to the national network, saying that some companies may not be able to move in the time frame shown in the decree, while others will need additional investments after the construction of the previous captive power units. The council indicated that this shift can lead to an increase in dependence on alternative energy sources, which increases foreign workflows of equipment such as solar panels.
If some industries move to the network, Sui Southern Gas Company (SSGC) and Sui Nortern Gas Pipeines Limited (SNGPL) will lose industrial consumers with high wage, which leaves them mostly from low local users. PBC stated that this may expand the deficit of gas companies, which requires either government intervention or an increase in gas prices for local consumers.
The Council urged the government to reconsider the impact of high gas prices on exports and manufacturing, and called for policy amendments to support industrial competitiveness.
