Persistent gas crisis vexes industrialists

Businessmen lament suffering mammoth production, financial losses

KARACHI:

Industrialists of Karachi have lambasted the government over lack of action towards the resolution of the issue of gas scarcity. They cited that businessmen had faced colossal financial and production losses in the last 66 days due to the unavailability of vital input.

“The government’s indecisiveness on this front has disrupted Pakistan’s export volume,” said Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Nasser Hyatt Maggo in a statement on Thursday. “Gas shortage is causing colossal financial and production losses for the businessmen and jeopardising export orders.”

He added that workers were also at risk of large scale layoffs as unrest and uncertainty prevailed in the economy.

Global communities and diplomatic circles in Pakistan were closely observing the deteriorating situation, he said fearing a drop in export orders in future.

Maggo further stated that Karachi’s industrialists were highly distressed as they were unable to operate industries and pay wages to employees.

On the other hand, he was of the view that exports and foreign earnings would endure a massive dent if the government failed to take action.

“The claims of the government of creating business and export-friendly ecosystem are incorrect,” Maggo lamented.

He observed that the leadership was turning a deaf ear to repeated requests of industrialists for support.

According to him, the silence of the government would sabotage the hard and priceless efforts of the businessmen as well as new investment made to accelerate industrialisation in Pakistan.

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“Why should the industries suffer and pay for the shortcomings of the government which caused the ongoing gas crises,” he questioned.

Maggo urged Prime Minister Imran Khan to take immediate notice of the situation and consider the appeals of the businessmen. He further called for swift resolution of the issue.

No option

Speaking to The Express Tribune, Arif Habib Commodities CEO Ahsan Mehanti admitted that industries of Karachi were experiencing financial and production losses due to unavailability of gas.

He shared that after acknowledging the concerns of businessmen, the government prioritised supporting the export-oriented sector due to unprecedented shortage of gas.

“These are testing times and energy shortage is a global issue arising out of the pandemic,” Mehanti emphasised. “Local supply lines are disrupted and shortages will seemingly prevail for next one year at the very least.”

Arif Habib Limited (AHL) Head of Research Tahir Abbas said that amid the winter season, the government was left with no option other than to divert gas to the domestic sector because production of the fuel from local fields had decreased over the past few years.

Consumer Rights Protection Council of Pakistan (CRPC) Chairman Shakeel Baig said that domestic consumers were also facing prolonged shortages of gas.

“It has become a challenge for the government to create a balance between domestic users and industrialists,” he said. “Although the government is drafting multiple strategies, it needs to enhance its endeavours to mitigate the energy shortage.”

He noted that suspension of industrial activity, due to unavailability of the input, will not be in the better interest of the economy because workers will lose their jobs.

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Sustainable Development Policy Institute Executive Director Dr Abid Qaiyum Suleri highlighted that gas was a highly demanded scarce resource because it was used for electricity generation, vehicle fuel, commercial and domestic use, industrial raw material and urea manufacturing.

“During winter, the domestic demand of gas increases,” he said. “Shortage of urea across the country has necessitated uninterrupted supply of gas to fertiliser manufacturers whereas increase in global crude prices means that gas will be used for electricity generation as well.”

Therefore, gas supply to Karachi based industries was temporarily restricted.

Published in The Express Tribune, January 28^th, 2022.

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