Gas crisis to hit GDP growth

Businessmen say energy shortage will hamper exports from Pakistan

KARACHI:

Industrialists have voiced fear that the ongoing gas crisis will deal a lethal blow to the country’s gross domestic product (GDP) growth, bring down export orders and increase the cost of production for the business community.

In a statement on Thursday, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Nasser Hyatt Maggo stated that the failure of the government to provide gas to the industry would result in mammoth losses to the country as well as the business community.

“The industrial base is losing its productivity and export orders while employment generation is declining as well,” he expressed concern. “These factors will jointly dent economic growth in the ongoing fiscal year.”

He urged the government in general and Prime Minister Imran Khan in particular to hold the relevant ministries and departments responsible for halting gas supply to the industries.

“It is no secret that surplus capacity is present at the existing LNG terminals, however, no professional planning has been done to avert the gas crisis in the ongoing winter season,” he lamented.

The FPCCI chief added that the industry was not against setting up new LNG terminals, however, the notion that the current crisis emerged due to the lack of LNG infrastructure was wrong.

In fact, a massive capacity, present at the LNG terminals, was not being utilised, he emphasised.

Maggo stressed the need to import a Floating Storage and Regasification Unit (FSRU) having a huge capacity to add larger volumes of gas to the distribution infrastructure and ensure supply of the fuel to industries at the earliest.

Read Karachi facing acute gas shortage

Speaking to The Express Tribune, Alpha Beta Core CEO Khurram Schehzad pointed out that the ongoing gas crisis would strike the manufacturing sector hard and was threatening exports of the country.

Union of Small and Medium Enterprises (UNISAME) Chairman Zulfikar Thaver said that gas shortage would hamper goods production and adversely impact GDP growth because the industrial productivity was shrinking.

“The manufacturing sector will face a hike in its cost of production because the alternative energy solutions, used by the industrialists, are far costlier than gas,” he said.

Thaver added that other factors of production such as labour wages, financing cost and logistics charges had spiked as well and feared that they would deal a blow to the economic growth.

Sustainable Development Policy Institute Executive Director Abid Qaiyum Suleri highlighted “when a country faces energy shortage, its growth rate is impacted”.

“However, Pakistan is not exactly facing an energy shortfall because the country is just experiencing a gas crisis which is part of energy mix,” he said. “We need to investigate which industries require gas and the impact that the crisis will have on them.”

Published in The Express Tribune, December 24^th, 2021.

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