Gas load shedding to dent exports

KARACHI: The government’s decision to suspend gas supply to the industrial units, connected to the Sui Southern Gas Company Limited (SSGCL), for at least one day/week will hamper the production activities, business leaders said on Friday.

SSGCL announced ‘one-day industrial gas holiday’, including for captive power plants, from May 15 (Sunday). It warned the industry in case of violation the gas will be suspended for 48 hours as penalty.

Industrialists said the latest initiative of the gas utility of imposing one-day gas suspension on weekly basis will put the squeeze on the industry already under pressure of falling exports.

“Export orders will be affected due to the decision of the gas utility as export sector remains active for seven days a week,” said Jawed Bilwani, chief coordinator of the Pakistan Hosiery Manufacturers Association (PHMA).

Bilwani, who is also representative of seven textile value-added industries in the country, said the utility, instead of reducing its line losses, is resorting to load shedding, creating difficulties for the manufacturing sector. 

The PHMA’s representative said the line losses, or unaccounted for gas (UFG), in Bangladesh is half a percent and in India, it is four percent as compared to 12 percent in Pakistan.

The country’s exports fell 13 percent to $17.32 billion in the July-April 2015/16 over the corresponding period of the last fiscal year. The fall of exports was linked with the tepid global demand.

Local industrialists, however, said policy issues are impeding the export growth.

Bilwani criticised the government for lifting the ban on new gas connections for the high rise buildings. “When natural gas is not available why the government is taking such decision at the cost of manufacturing production,” he asked.

Last month, the value-added sector sent a memorandum to the Prime Minister Nawaz Sharif and Shahid Khaqan Abbasi, Minister for Petroleum and Natural Resources, apprising them about the possible setbacks as a result of the ban lifting.

Pakistan Apparel Forum, representing four leading value-added industries, in its letter to the prime minister, said globally the governments give industries priority in natural gas supply while domestic and commercial sectors are supplied liquefied petroleum gas. “But in Pakistan, the natural gas is being supplied to domestic and commercial sectors at the cost of industries, which badly require the gas,” the letter said. It said the UFG is approximately 10 percent in the domestic and commercial sectors.

The forum urged the prime minister to ensure that the gas moratorium on high-rise building remain intact and instead ample and adequate supply of gas should be ensured to the industries to enable the export sector to enhance their exports.

Bilwani said no response was received from the PM office and the SSGCL issued schedule for gas load shedding.  

He said the initiative will create difficulties for exporters to timely meet the orders and resultantly the same will divert to other countries. He said industries in Karachi contribute around 50 percent of the total textile exports of the country.