Pakistan exports become uncompetitive after gas prices doubled: Report

Pakistani exports at risk as government doubles gas prices, jeopardizing $60 billion export target and increasing manufacturing costs.

“Pakistani exports have become uncompetitive after the government doubled gas prices for in-house power generation by factories, endangering the target of a three-year goal of increasing exports to $60 billion,” according to a business body.

“The Pakistan Business Council (PBC) informed Prime Minister Shehbaz Sharif on Tuesday (February 4, 2025) about the development through a letter,” the Export Tribune reported.

“In a paradoxical situation, the miseries of industries are apparently an achievement for the government that has met an International Monetary Fund (IMF) loan condition to either make gas unaffordable for in-house power generation or completely cut it off,” the paper reported.

“The government has chosen the first option, which became the reason for the PBC — a representative body of manufacturers — to write a letter to the Prime Minister,” reported the paper.

"Your $60 billion export target by 2027 is unlikely to be achieved. The competitiveness of manufacturing for the domestic market, which reduces reliance on imports, will also suffer owing to the higher cost of gas," the PBC wrote to the PM.

Pakistan's exports this year are expected to increase to more than $35 billion but this is insufficient to take the nation out of the debt cycle.

The Economic Coordination Committee (ECC) of the Cabinet last week increased gas prices for in-house power generation — known as captive power plants (CPPs) — by 18%.