Frustrated because of continuous gas shortage, the three major industrial associations have joined hands to crush the Compressed Natural Gas (CNG) sector which they say is expanding at a rate of 25% annually and is eating away at the industrial gas share.
All Pakistan Textile Mills (Aptma), Independent Power Producers Advisory Council (IPPAC), and fertiliser manufacturers teamed up on the Save Pakistan Industry Forum platform to start an awareness campaign on how to utilise natural gas more efficiently. In a joint press briefing, the associations blamed the government’s poor policies of diverting the gas to the CNG sector for providing fuel to 3.5m vehicles powered by CNG in Pakistan instead to industries which they say are on the verge of extinction.
Speaking on the occasion, Aptma Chairman Gohar Ijaz said that one automobile out of every four in the world that uses CNG as a fuel is in Pakistan. He did not give the source for this information. The textile and fertiliser sector has faced 180 days of gas outages last year and if the scenario persists then industries will not have the capacity to even operate for 90 days this year, Ijaz said. The industry has not made any investments as they are unable to cover their fixed costs.
Textile sector has also been unable to expand its workforce therefore the sector is not in a position to accommodate one million influx of labour the market faces every year, he added. The government has given Rs50 billion in subsidies to the CNG sector, however it collected Rs300 billion in high electricity tariffs. The government should focus on giving targeted subsidy, Ijaz said.
Agritech Chief Executive Officer Ahmad Bilal said that the fertiliser sector functioned at 50% of its capacity last year and the company fears that they will only able to operate at 30% of the total capacity due to gas shortfall. Surge in food prices in recent years is due to unavailability of fertilisers, the government imports fertiliser at Rs3,500 per bag and sells it at Rs1,750 per bag after giving billions of rupees as subsidy, he said. The sector can produce 0.6 million tonnes of fertiliser annually, creating a surplus to export, he added. He went on to say that they have injected $2.2 billion in the last four years to expand their operations but to no avail. Fertiliser sector’s profitability has dipped sharply due to gas outages. Presently the CNG sector demands 500 million cubic feet per day (mmcfd) of gas which if not curtailed will hit 2,000 mmcfd and Pakistani industries will collapse, he warned.
Also present on the occasion, IPPAC Chairman Abdullah Yousaf said that generating electricity from gasoline costs Rs22 per unit instead of Rs5 per unit if produced using gas. If Independent Power Producers (IPPs) receive uninterrupted gas supply, Pakistan will be able to curb its energy crisis and be cured from the scourge of circular debt, he stated.
Published in The Express Tribune, June 6th, 2012.
More in BusinessCNG body divided over strike call