This proposal would not violate Article 158 of the Constitution which stipulates that "the province in which a well head of natural gas is situated shall have precedence over other parts of Pakistan in meeting requirements from that well head, subject to the commitments and obligations as on the commencing day." In recent months the Punjab industrial sector has complained that the difference between the price of domestic gas and imported Liquefied Natural Gas (LNG) is around 72.8 percent and they are unable to compete domestically leave alone internationally. Failure to bridge the price gap would imply either that industry would relocate from Punjab to Sindh or Khyber Pakhtunkhwa (KPK) or else out of the country, sources added.
This was revealed in discussions with industry representatives, energy experts, economists and government officials privy to developments. Punjab would then suffer from heavy unemployment, low productivity and consequently a reduction in per capita income, they warned.
Former Prime Minister's Advisor on Petroleum & Natural Resources, Dr Asim Hussain when in office had repeatedly and correctly argued that to address the energy supply related issues of industrial sector the government must bring domestic gas prices at par with other fuels or else the energy crisis would never be resolved. Senior Petroleum Ministry officials as well as sector experts fully support this but point out that political ground realities make this a difficult proposal to implement.
Governments are more concerned with votes and all have used extending gas connections even now when there is a widening demand supply gap to attract voters, they further stated.
A top official of the all Pakistan Textile Mills Association (APTMA) requesting anonymity while talking to Business Recorder said that currently Punjab based industry was getting imported Liquefied Natural Gas (LNG) at Rs 1,037 per Million Cubic Feet per Day (mmbtu) as compared with Rs 600 in Sindh and Khyber Pakhtunkhwa. He added that the removal of the moratorium on new gas connections by the Sharif administration for political expediency would further reduce supply to industry.
In January 2016 APTMA requested the Petroleum Ministry to provide 300 MMCFD LNG to meet the 24/7 requirement of the textile industry, saying that it will greatly help the industry to operate mills at optimum level of production. APTMA member mills have already registered their interest in using RLNG and necessary supplemental agreements have been provided to SNGPL. However the input cost differential has made Punjab textile units fear closure.
APTMA Punjab Chairman Syed Ali Ahsan decried that textile units in the province simply can not survive by paying Rs 11 per unit for electricity compared to Rs 5 per unit paid in other provinces. APTMA Punjab leadership maintains that Punjab-based mills can not operate with an annual energy price differential of Rs 70 billion with mills in Sindh and KPK. Punjab based textile mills are consuming 1,400 megawatts of electricity and the government must supply electricity at Rs 7 per unit in a bid to enable the industry to survive locally and compete internationally, Ahsan said.
On 27 April APTMA officials while briefing a parliamentary panel pinpointed that the high cost of LNG along with other factors is the root cause for the decline in textile exports. As per officials the government has allocated 220 mmcfd of LNG to Punjab based textile industry.
Sources in textile industry told Business Recorder that they have held several meetings with Federal Minister Petroleum and Natural Resources, Shahid Khaqan Abbasi and presented the textile industry's request to him. Textile industry had served as a catalyst for the economic development of the country, contributing around 60% to the total export earnings.
Copyright Business Recorder, 2017