3 months gas closure to captive power industry will lead to closure of industrial units. Ensure uninterrupted gas supply in winter through LNG import and better load management. Govt. should take measures for regular gas and electricity supply to industry.

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(29 October, 2018)

President Pakistan Businessmen and wad Forum (PBIF), President AKIA, Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Monday said that Sui Southern Gas Company SSGC has issued a notice of gas closure during the period of December to February, i.e. three months which is worrying for the business community. According to an estimate there are approximately 1000 units in Karachi, which are completely dependent on the supply of natural gas. These units are comprised of pharmaceuticals, tiles, confectionery, packaging, tiers and other important export oriented industries. The captive power units are playing vital role in national economy and not only employees millions of people but also contribute millions of rupees to national exchequer in form of taxes and millions of dollars to foreign reserves in form of exports.

The veteran business leader while talking to the business community said that the only available option to captive powers based units is natural gas as K-Electric is unable to provide uninterrupted supply in the current situation. In addition the diesel generator costs Rs. 35 per unit as compare to the gas per unit cost of Rs. 9. If the natural gas supply is being closed to these industries for three months, millions of people will get unemployed, national exchequer will lose million of rupees in term of taxes, exports will have drastic impacts, trade deficit which has already accumulated to $ 10 billion from July to September will further swell and the position of balance of payments will worsen. The reduction in industrial production will also cause inflation in the domestic market due to reduced supply. Government has exempted the export oriented industries including textile, carpet, sports, leather and surgical goods in order to save export sector from negative impacts of gas tariff hike. Now if the gas supply is closed to various export based industries, it will lead to closure of such units.

The former minister said that to fill the demand supply gap of gas, government may offer incentives for gas exploration to local and foreign investors however for instant resolution LNG may also be imported. The gas pipeline project with Russia is required to be completed early in order to curb such situation in future. According to OGRA Sindh’s contribution in gas supply is 63 pc followed by Balochistan, KPK, Punjab and LNG imports by 17 pc, 7 pc, 3 pc and 7 pc respectively. Punjab consumes 46 pc of gas followed by Sindh 42 pc, KPK 10 pc and Balochistan 2 pc.

Mian Zahid Hussain said that gas load management should be improved in order to serve the industrial sector with uninterrupted supply like domestic and commercial consumers enabling the industry to play its role in the economic growth of the Country. Any measure affecting industrial production cannot be acceptable to the business community and requests the concerned quarters to take concrete measures for uninterrupted electricity and gas supply to the industries. Sui Southern Gas Company should immediately withdraw the notices issued to captive power industries regarding closure of gas for three months.

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