KARACHI
Karachi Chamber of Commerce & Industry and its affiliate industrial town associations: SAI, KATI, LATI, FBATI, NKATI, SSHAI & BQATI fully reject the notices issued by SSGCL for closure of gas to industries of Karachi starting from 15th November 2022 to 28th February 2023 due to the industrial production including manufacturing meant for export will be crippled and may come to standstill.
The export industries of Karachi contribute to more than 54 percent in the national exports while the general industries of Karachi also cater more than 50 percent of national need. It is the responsibility of the Government to ensure the wheels of the industries should run smoothly in order to support the economy which is already going through a severe crises and consider and implement the rationale and workable plan of gas supply given by the industry to the Committee, in the national interest.
The Committee has noted with great concern that the matter of supply of gas was highlighted very well on time to the Federal Government to plan in advance and take all appropriate measures to ensure supply of gas to the industries in Karachi instead of complete gas outages which may lead to huge decline in exports and revenue, closure of industries and massive layoffs.
A Committee on Gas matters was formed by Federal Government where in the representatives of Industries from Karachi have floated many prudent proposals and had given practical and workable suggestions as how to tackle incoming shortage of gas, nevertheless, the notices issued to industries for closure of gas by SSGCL cover none of them.
The Committee gave an idea of closing down gas supply for two days in a week in winter for every 12 hours and also suggestion was given for Gas Load Management on rotation basis so that the industrial production must not stop at all. Discussions were also held to close50 percent Captive Power Plants.
It was suggested that the industries having proper power/ electricity supply from K-Electric shall close down their CPPs 100 percent, in view of the gravity of situation, wherever possible. It was also discussed that usage of gas shall be closed for CPPs whereas the gas must be ensure to supply gas for operating the industrial boilers. Besides, other measures of energy conservations should also be adopted.
SSGCL’s gas closure notices issued are also in utter contrast as it is not mentioned how the Company will supply Gas to Export-Oriented Industries in winter which is a priority sector. The KCCI and its affiliate seven industrial town associations reject this gas curtailment plan of SSGCL and appeal the Prime Minister of Pakistan and the Chief Minister of Sindh to immediately intervene in this matter and save the industries from closure.
The gas closures cannot prove good for the economy, especially this year, as no special arrangements have been made by the Government to purchase RLNG to inject in the system. Pertinent to mention here that our Regional Competitor Bangladesh practice a pragmatic and wise plan during winter for gas supply to various sectors.
If we compare it with Pakistan, Bangladesh has accorded priority to industry by supply 961 mmcfd which is 34% share of total gas being supplied to the industries while in Pakistan gas supply to industries is only 18% with a supply of 721 mmcfd only. Bangladesh gas supply to domestic sector is 13% with supply of 368 mmcfd, Comparatively in Pakistan, gas supply to domestic sector is 21% with supply of 857mmcfd, {Source: Energy Yearbook (PK), Economic Review (BN)}
The representatives of industry of Karachi have also offered if Government wants to closed own, the CPP of General Industry shall be closed 50 percent, however, in that case gas should be supplied with required pressure for industrial activity and the industries shall sign MOU with SSGCL in this regard but SSGCL had denied.
The SSGCL while issuing the gas closure notices has not taken into confidence the Committee constituted by the Federal Government. It was agreed with SSGC that they will not discontinue gas to the captive units of “Continuous Plants” as these Continuous Plants cannot afford any interruption.
