Gas supply suspension cripples industries, halts production

Gas supply suspension cripples industries, halts production

KARACHI: The Karachi Chamber of Commerce & Industry (KCCI) and its affiliated industrial town associations have shown deep distress towards non-supply of gas to industries of Karachi for the last 14 days since 11 June, 2021 with ZERO gas pressure which has crippled industries and halted production that will ultimately lead to huge losses.

According to a statement issued, the supply of gas has been closed in the name of annual turnaround (ATA) of Kunnar Pasaki field. Previously such disruption was caused due to ATA of Gambat field. All such ATA / maintenance must be planned at least six months and intimated to all concerned promptly. If SSGC as per its claim was facing gas shortfall of 200-250 mmcfd from Kunnar-Pasakhi Deep (KPD) gas field and Engro Terminal, this shortfall could have been surmounted through RLNG for the time being but instead of doing so, they announced abrupt suspension of gas supplies to industries which was totally unacceptable as it would prove disastrous not only for the business community but also for economy and the public.

KCCI appealed Prime Minister Imran Khan to order SSGC to refrain from suspending gas supply and also order a probe into the massive gas mismanagement as the industries in Karachi, which were already going through unbearable circumstances, cannot afford any interruption in their production activities due to suspension of gas supplies.

Despite of the fact that the Government has accorded priority in supply of gas to export sector, the export industries of Karachi are also deprived of gas. Exporters are fearing excessive delays in export shipments and will lead to shipment by Air or cancellation of orders. Whereas, the export shipment of 40 feet container by sea to USA costs USD 8,400/- while the same shipment by air costs USD 93,000/- which is equal to the total cost of said consignment of 40 feet container. In this manner, the export industries are facing colossal financial losses and shall be bankrupted leading to permanent closure and massive layoffs. Needless to mention here that more than 40 allied industries which include general industry are also associated with export industries which provide them goods and services.

It is pertinent to note that Karachi contributes to around 60 per cent in national exports. Due to the situation if 10 per cent export is affected it means 5 per cent decline in national export. The estimated losses caused to national exports on daily basis comes to around USD 44 million (PKR 7 billion). As per the Government’s gas priority policy five export sectors would be treated on a par with the power sector in gas supplies. In contravention to its own policy, the Government is providing gas to power company of Karachi while export sector has been deprived to gas.

KCCI is surprised as to why SSGC has disrupted gas supply on account of Annual Turn Around of Kunnar field on working days which must have been done during Eid Holidays when there is no industrial usage of gas. KCCI fail to understand why such incidences happen repeatedly only in Karachi in every 3-4 months. Whether such attempts on part of the Government are deliberate to compel the industries of Karachi to shift abroad? Why should the export industries of Karachi may bear the brunt of the mismanagement caused due to ill-planning on part of the Ministry of Petroleum and SSGC?

KCCI appealed to the Prime Minister of Pakistan and Federal Minister of Energy to take immediate notice of Zero Pressure of gas to industries of Karachi and intervene to resume gas as quick as possible so that the industries and export must not suffer further in the best interest of economy, exports and foreign exchange earnings.