President, SITE Association of Industry (SAI), Saleem Parekh appealed to the Prime Minister, Ministry of Commerce, Finance and Sindh Chief Minister to immediately intervene in this matter before it is too late as non-availability of gas and cost of doing business in Sindh is getting worse day by day and under these conditions industrialists would have no choice except to shutdown their factories leading to layoff of millions of workers.
Expressing serious concerns over non-availability of gas in Karachi since Saturday, he termed it 'disastrous for the exporting industries' and asked Federal and Provincial governments where are they heading.
He said that Pakistan's exports in the month of November 2018 have already declined by 6.4 percent and only $1.84 billion of exports were registered. Now with this scenario of no gas, how can industries meet their exports targets, he asked.
It is pure incompetence of SSGC with over 14 percent un-accounted for gas (UFG) in general and upto 41 percent UFG in interior Sindh. Gas producing Sindh province share has been diverted to Punjab without taking care of the needs of Sindh. Sindh produces 73 percent of gas and uses only 36 percent, while Punjab is producing 5 percent of gas and consumes 49 percent.
Parekh said that another biggest problem is fixed rate of return of 17 percent on assets being offered to these gas utilities companies making them white elephants, useless because that is stopping them to come out of their comfort zone, reducing losses and making themselves competitive.
SSGC is supplying RLNG to industries, which has higher calorific value than natural gas, due to difference in density it is causing higher escapes from lines and increasing UFG and OGRA is not compensating this loss.
Parekh further added that consumption of gas is increasing while our yearly production is stagnant, although Pakistan has sixth largest untapped shale gas reservoirs in the world.
President of Korangi Association of Trade & Industry (KATI) Danish Khan expressed grave concerns over interrupted gas supply to the industry and captive power plants in the city. He said that industrialists have already told the federal and provincial governments that interruption in gas supply will directly hit the industrial production and will impact national economy adversely.
He said that due to gas load shedding captive power plants are facing sever issues and this is affecting particularly Pharmaceutical industry, where production of life saving drugs could also come to a halt, the consequences would be drastic for the common people, he noted.
Danish Khan was of view that industrial production was already facing a lot of hurdles and gas load shedding will directly affect the export oriented industrial sector.
Senior Vice President KATI, Faraz-ur-Rehman said that PM Khan said on many occasions that the only way to stable economy is to boost our exports, but in current situation it would be near to impossible while the export related industry were facing sever energy issues.
He also urged the federal government to provide the due share of gas production of Sindh under the constitutional obligation, as the industry and domestic consumer couldn't bear gas shortage and were deprived of their basic right under the law of land.
Vice President KATI, Maheen Salman said that interruption in gas supply is totally unacceptable for industry and authorities should make sure its uninterrupted availability to the industrial sector and to the captive power plants.
Leader of United Business Group (UBG), SM Muneer said that in a recent meeting with the Prime Minister, Imran Khan categorically reaffirmed that no load shedding of gas will be observed for the industry of Karachi in coming months, so that export targets could be met.
President of the North Karachi Association of Trade and Industry (NKATI) Syed Tariq Rasheed and Captain Moiz Khan criticised the government's failure to manage the ongoing gas crisis and said that industries cannot run in present circumstances.
They said that the government has miserably failed to provide gas and water to run industrial units efficiently for at least 6 days a week.
Industrialists from Port Qasim criticised the government's failure to manage the ongoing gas crisis and said that industries cannot run in present circumstances.
They said industries are functioning under tremendous pressure from gas crisis and fighting a war for its survival.
Senior Vice Chairman of Businessmen Panel (BMP) Mian Zahid Hussain, FPCCI Presidential candidate of BMP Allauddin Marri and Chairman Sindh Zakaria Usman said that the business community has raised voice and showed serious concerns over the notice of SSGC regarding closure of gas to the industries for three months in the winter season. Despite assurance of the Prime Minister Imran Khan and Finance Minister Asad Umar to various delegations of business community regarding reversal of gas closure decision, the SSGC has again decided to close gas supply to the industrial sector, which is very discouraging.
They said that over one thousand industrial units of Karachi are not only providing employment to thousands of people but also contribute millions of rupees to the national exchequer in term of taxes and earn huge amount of foreign reserves against exports. Natural gas is the only option available to the captive power industries for their production and operations given to non availability of uninterrupted power supply from the K-Electric and high cost of diesel generators as it costs Rs 26 per unit higher than that of the natural gas.
Cost of doing business becomes unbearable to the industrial sector if they use diesel generators instead of gas.
The decision of closure of gas should be immediately reversed, else thousands of people will be left unemployed in addition to millions of losses to the national exchequer and foreign reserves. Trade deficit has already reached to $15 billion in the first five months of current fiscal year will further worsen.
BMP leaders said that if the decision of gas closure has not been reverted, the industrial production will see huge reduction which will further increase the already rising inflation in the country in the backdrop of unstable USD and will equally affect trade, industry and the general public.
Though government is adopting industrial friendly policies, but hurdles in implementing such policies should be addressed and resolved immediately. On one hand, the export sector has been given incentives for increasing exports, but on the other hand gas has been closed to the industrial sector, which is drastic for the country's industry and against the vision of the current government.
Mian Zahid Hussain said that to cover the demand supply gap of gas, the government should increase import of LNG and as decided in the ECC meeting in November the proposed 150 - 200 MMCFD LNG should be included in the system to avoid load shedding of gas to the industrial sector, so that this important part of the economy can play its role in the economic growth of the Country and the industrial sector may further grow.
Allauddin Marri said that the business community will never accept any measure causing loss to the industrial sector and request the competent authorities to take immediate measures for uninterrupted gas supply to the industrial sector and revert the notice of gas closure being issued to general and captive power industries by the SSGC.
Zakaria Usman said that the criminal silence of the FPCCI on various issues of the business community including closure of gas to the industrial sector is unforgivable. Gas closure to general and captive power industries will cause unbearable damage to the industrial sector and national economy.