Turning off the pressure

SSGCL served notice to halt winter gas supply to captive power plants which has industrialists agitated

Supply is scant when the gas supply company issues a closure notice to industry heavyweights in the country’s economic hub. Sui Southern Gas Company Ltd (SSGCL) served a notice to halt winter gas supply to captive power plants which rightfully has industrialists agitated. Exploring deeper, we wonder if this is the only solution available. Stopping gas supply effectively means that factories are unable to operate and for a three-month closure of industry in Sindh, we can expect a significant impact on GDP.

With identifying whether shutting gas supply is the correct solution, it seems that the government, directly owning the majority of the company, has not worked hard enough to procure alternative supply. The statistics and figures support this claim. Sindh produces 70% of the country’s gas supply and receives only 30% of the total even though it is entitled to 50% as per what was agreed upon during General Pervez Musharraf’s reign. As per economic activity and productivity, the larger share of the pie makes sense. Furthermore, as far as exports are concerned, manufacturing is the third largest sector to contribute to the GDP after the agriculture and service industries.

The Site Association of Industry president’s caution should be taken into consideration. He claims high revenue seasons are approaching with demands around Christmas and other proximal holidays requiring increased productivity at factories. Secondly, with the US-China trade war and an expected growth in demand for the Pakistani industry, SSGCL should reconsider its announcement and feel the pressure to find an alternative solution to the gas shortage problem. If we are looking to expand our economy, we should not have to reject opportunities such as the expected rise in demand by US companies considering Pakistani manufactured goods as a back-up to China. It would be embarrassing and carry long-term repercussions if our industry develops a reputation of being unable to deliver promised goods on time because factories cannot be powered. This would indicate poor internal management. The timing of the closure during a busy season should be reconsidered along with its consecutive three-month duration.

Published in The Express Tribune, November 1^st, 2018.

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