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Express Tribune
11 hours ago
- Business
- Express Tribune
'Gas price hike will hit exports'
Listen to article Chairman Businessmen Group (BMG) Zubair Motiwala and Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Jawed Bilwani have strongly opposed the proposed gas tariff hike for industrial processes, calling it illogical and damaging for Pakistan's already struggling industrial sector. The proposal is expected to be discussed in the upcoming meeting of the Economic Coordination Committee (ECC). In a joint statement, Motiwala and Bilwani said the hike is unjustified in light of current global and domestic energy trends. They noted that Brent crude prices have declined and that the SNGPL system is already facing a surplus of imported RLNG, with 300 to 400mmcfd going unutilised due to high prices and excessive taxes. They argued that the government should focus on improving supply management instead of further burdening industry. They emphasised that although only 80 to 100 Independent Power Producers (IPPs) use process gas, more than 8,000 Small and Medium Enterprises (SMEs) rely on it. A tariff increase would cripple these SMEs, which form the backbone of Pakistan's manufacturing sector. Instead, they recommended a 20% reduction in gas tariffs to help SMEs stay afloat amid rising input costs and harsh budgetary taxes. The leaders highlighted that OGRA's recent decision on May 20, 2025, reduced SSGC's gas tariff by Rs103.95 per MMBtu to Rs1,658.56, reflecting falling global fuel prices. They questioned how a hike for industrial users could be justified when regulatory bodies themselves recognised falling costs. OGRA also set a revised tariff of Rs1,895.25 per MMBtu for SNGPL, which remains below the proposed rate. Petitioners during OGRA's hearings also flagged inflated RLNG diversion costs and unrealistic Brent crude pricing assumptions that distort true gas pricing. Motiwala and Bilwani warned that raising gas tariffs would worsen inflation, increase unemployment, and discourage local and foreign investment. Industry, already hit by electricity costs, currency instability, and shrinking demand, cannot absorb further shocks. They called on the ECC to immediately withdraw the proposal and conduct a transparent review of gas pricing, aligning it with OGRA's findings and global trends. "Burdening industry to offset inefficiencies elsewhere is unacceptable," they said. "Support for industry is essential for true economic recovery."
Business Recorder
12 hours ago
- Business
- Business Recorder
KCCI urges govt, ECC to withdraw gas tariff hike proposal
KARACHI: Chairman Businessmen Group Zubair Motiwala and President Karachi Chamber of Commerce & Industry (KCCI), Muhammad Jawed Bilwani, while strongly opposing proposal to increase gas tariff for industrial processes in the upcoming meeting of the Economic Coordination Committee (ECC), termed the proposal illogical and detrimental to Pakistan's already struggling industrial sector, particularly at a time when input costs are surging and exports are under severe pressure. Zubair Motiwala and Jawed Bilwani emphasized that the move is unjustified given the current energy market dynamics. They noted that international Brent crude prices have declined, and the SNGPL system is already dealing with a surplus of imported RLNG, with around 300 to 400 MMCFD going unutilized. This surplus exists because power and captive sectors are reluctant to purchase RLNG at exorbitantly high rates compounded by excessive taxes and levies, which has resulted in inefficient resource utilization. Rather than penalizing the industrial sector, the government should be working to improve gas supply management and rationalize pricing. They emphasized that while only around 80 to 100 Independent Power Producers (IPPs) utilize process gas, it is critical to recognize that the livelihoods of over 8,000 Small and Medium Enterprises (SMEs) also depend on this essential resource. Any increase in the gas tariff would severely impact the already struggling SME sector, which plays a vital role in the country's economic fabric. Rather than imposing a hike, a more prudent policy would be to reduce the process gas tariff by at least 20 percent, enabling SMEs to remain operational and contribute effectively to the economy, they suggested, adding that at a time when the business community is already burdened by the harsh taxation measures introduced in the budget, a tariff increase would only deepen their challenges. Given that the country has surplus indigenous gas, the logical course of action would be to offer it at lower rates to stimulate industrial consumption, boost production, and drive economic growth. They further highlighted that OGRA itself, in its decision dated May 20, 2025, approved a significant reduction in gas tariffs for SSGC by PKR 103.95 per MMBtu, setting the new rate at approximately PKR 1,658.56 per MMBtu. This decision was made in recognition of cost realities and declining fuel prices. 'If OGRA found justification to reduce the tariff for SSGC, how can the government justify a hike for industrial consumers?' Chairman BMG and President KCCI questioned. They added that such contradictory measures create serious disparities and undermine industry confidence in policy consistency. They also pointed out that OGRA's determination for SNGPL prescribed a revised price of Rs 1,895.25 per MMBtu, which is still below the proposed hike. Moreover, during OGRA's own hearing process, several petitioners highlighted the existence of a projected RLNG surplus of approximately 400 MMCFD; equivalent to 79,337 BBTU or nearly 25 LNG cargoes. Petitioners also demanded the revision of Brent crude pricing assumptions in OGRA's ERR, noting that the assumed price of USD 75.33 per barrel was higher than global spot rates, leading to artificially inflated diversion costs and non-transparent, non-cost-reflective pricing. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business
- Business Recorder
New member on Board of Directors of SNGPL: Summary sent to PM for appointment of Arif Hameed
ISLAMABAD: The Ministry of Energy (Petroleum Division) has moved a summary to the prime minister for the appointment of Muhammad Arif Hameed, former MD, as a new member to the Board of Directors of Sui Northern Gas Pipelines Limited (SNGPL), sources said. Arif Hameed served as a regular employee of the SNGPL until September 24, 2011, holding the position of senior general manager. He was appointed managing director SNGPL and continued in that role beyond his initial term through multiple extensions until September 2015. On September 2, 2015, the Ministry of Petroleum and Natural Resources moved a summary to the prime minister for Hameed's removal. The prime minister approved the summary and on September 5, 2015, Hameed was officially removed from his position. During his time as MD, the company witnessed unprecedented increase in Unaccounted for Gas (UFG) gas lost in the pipeline system which far exceeded the limits prescribed by the Oil and Gas Regulatory Authority (OGRA). This trend of rising UFG directly translated into financial losses for the company and reflected poorly on his administrative control. Despite repeated warnings and oversight by the OGRA, no effective strategy was implemented to curb this growing problem, which continues to burden SNGPL's financial health. Another major point of concern was Hameed's alleged resistance to the government's fast track LNG-based energy projects. At a time when the country was facing an energy crisis, Hameed was accused of deliberately stalling progress, despite clear directions from the then petroleum minister and the ministry. Hameed challenged this decision before the Lahore High Court (LHC) through writ petition No 26232/2015, he later withdrew the case after tendering his resignation. After retirement, Hameed ventured into the petroleum business, opening a filling station in Gulberg, Lahore under the name U&S Gulberg Filling Station. In January and February 2021, the filling station was found guilty of short-measuring customers, a violation confirmed by OGRA in its January 29, 2025 order. Hameed was also allegedly involved in appointment and promotion of a SNGPL secretary. An inquiry conducted on DP No 76 MFDAC 2017-18 concluded that the secretary received multiple out-of-turn promotions and salary increments totalling Rs 6.292 million in violation of company policy. The report found no tangible justification for bypassing well-defined appointment procedures and held Arif Hameed, then Senior GM HR Liaquat Raza and HRC Chairman Mirza Mahmood Ahmad responsible for misusing their authority to benefit the secretary. The Ministry of Energy has now included Hameed's name in a summary sent to the prime minister for the appointment of new directors to the SNGPL Board. Also nominated are Muhammad Ahmad Qayyum, reportedly a close relative of the current petroleum minister. The correspondent sent questions to the spokesperson of the Ministry of Energy (Petroleum Division), but no response was received by the time the story was filed. Copyright Business Recorder, 2025
Business Recorder
4 days ago
- Business
- Business Recorder
OMCs not supplying enough fuel to pumps: PPDA
KARACHI: The Senior Vice Chairman of the Pakistan Petroleum Dealers Association (PPDA), Malik Khuda Bakhsh, has alleged that oil marketing companies (OMCs) in the country are failing to supply petroleum products to petrol pumps in line with their orders, despite clear directives from the Oil and Gas Regulatory Authority (OGRA). In a statement issued on Monday, Bakhsh attributed the disruption to the prevailing geopolitical tensions in the Middle East, particularly the Iran-Israel conflict, claiming that certain OMCs are deliberately limiting supplies in anticipation of potential price hikes. 'The oil marketing companies are not delivering petroleum products to dealers as per their committed orders.' He said OGRA has already instructed these companies to maintain a minimum 20-day stock as per the conditions of their operating licenses, and currently there is no shortage of petroleum products in the country.' 'Enough POL stock present in country' He said Karachi alone consumes 2,500 metric tons of petrol daily, and oil marketing companies presently have sufficient reserves to meet this demand for more than 20 days. He revealed that while most fuel stations continue to receive regular supplies, a few pumps operated by a particular company have run dry because the company failed to fulfil orders to its dealers. He urged the government and regulatory authorities to take immediate notice of this situation, warning that any artificial shortage created by curtailing supplies would harm consumers and place undue pressure on the government. 'The government must act to prevent oil marketing companies from exploiting the situation for commercial gain. If a shortage is engineered, it will cause public hardship and damage the government's credibility.' Malik Khuda Bakhsh reassured the public that there are currently no actual supply constraints in the market and stressed that OGRA's monitoring mechanisms must be enforced to ensure uninterrupted fuel availability nationwide. Copyright Business Recorder, 2025
Arab News
5 days ago
- Business
- Arab News
Pakistan says holds ample petroleum reserves amid fears of Iran's closure of Strait of Hormuz
ISLAMABAD: Pakistan has ample petroleum reserves and an uninterrupted supply chain, a junior minister said on Monday, amid fears that Iran may cut off a vital oil and gas shipping lane in retaliation for US strikes on its nuclear facilities. Iran's parliament has approved cutting off the Strait of Hormuz, a narrow shipping lane in the Arabian Gulf through which about 20 percent of global oil and gas passes. It's now up to Iran's national security council to decide whether to move forward with the idea, which could lead to a spike in the cost of goods and services worldwide. The price of oil jumped 4 percent shortly after trading began on Sunday night, but it quickly pared back as the focus shifted from what the US military did to how Iran would react. Oil futures were flip-flopping in Monday morning trading between gains and losses. They still remain higher than they were before the fighting began a little more than a week ago. Pakistan's State Minister for Finance and Railway Bilal Azhar Kayani denied rumors about a shortage of petroleum products in the South Asian country, stressing that his government was closely monitoring developments following tensions between Iran, Israel and the US to ensure stability. 'The Oil and Gas Regulatory Authority (OGRA) has directed all oil marketing companies to strictly maintain mandatory reserve levels in light of current global conditions, mitigating potential risks,' Kayani was quoted as saying by Pakistan's Press Information Department. 'There is no cause for concern as petroleum product inventories are sufficient and supply operations continue smoothly across the nation.' The statement came hours after President Donald Trump called for the US and other oil-producing economies to pump more oil as the White House sharpened its warnings to Iran against closing the Strait of Hormuz. Global markets were trying to ascertain what lays ahead after the US struck on Sunday key Iranian nuclear facilities with a barrage of 30,000-pound bunker busting bombs and Tomahawk missiles. Pakistan lacks adequate resources to run its oil- and gas-powered plants and mainly sources its oil from Arab Gulf nations. Kayani reassured citizens that the Prime Minister's office, Ministry of Petroleum and the Ministry of Finance were continuously monitoring the situation. 'We are fully prepared to address any uncertainties,' he said, adding the government was committed to ensuring the country's energy security.
