Gas Price Hike Threatens Pakistan's Export Ambitions

The recent decision by Pakistan to double gas prices for in-house power generation has jeopardized its export target of USD 60 billion by 2027. The Pakistan Business Council warns that this move will hurt manufacturing competitiveness and fail to reduce import reliance, amid stringent IMF loan conditions.

The ability of Pakistan to compete in the global export market is under threat following the government's decision to double gas prices for factories generating their own power. This move risks undermining a three-year export target of USD 60 billion, a concern raised by the Pakistan Business Council (PBC).

In a letter addressed to Prime Minister Shehbaz Sharif, the PBC highlighted that while the gas price hike fulfills conditions set by an International Monetary Fund (IMF) loan, it severely impacts manufacturing competitiveness. The government's decision has doubled the cost per million British thermal units (mmBtu) of gas, potentially exceeding global RLNG prices.

With manufacturing heavily reliant on gas-fueled captive power, the increased costs threaten to stall export growth and diminish investment appeal. The PBC also warned of lost opportunities from diverted global orders due to the increased expenses, cautioning that reliance on the national grid remains unlikely to improve.