If gas supply stays unstable, so will exports: BMG

Says ill-planned gas chart giving priority to domestic consumers is main cause for economic issues

KARACHI:

Pakistan is struggling to achieve export stability as the volume constantly declines due to the absence of a persistent supply of gas, believe industrialists and researchers.

Speaking at a public hearing organised by the Oil and Gas Regulatory Authority (OGRA) on Monday, Businessmen Group (BMG) Chairman and Former President of the Karachi Chamber of Commerce and Industry (KCCI), Zubair Motiwala lamented, “How can the government expect exporters to deliver and compete with Bangladesh and India when they have no steady supply of gas?”

The public hearing of the Sui Southern Gas Company’s (SSGC) petition was presided over by Ogra Chairman Masroor Khan, other attendants included Ogra Member Oil Zainul Abideen Qureshi and Member Finance Mohammad Naeem Ghori.

“We are capable of enhancing exports by 50% within the installed capacity, but this can only be achieved when gas supply is available at the required quantum and quality along with a competitive price tag,” said the BMG chairman.

Citing the Energy Year Book of Pakistan and Economic Review of Bangladesh, Motiwala revealed that, “Bangladesh gives 34% gas to its industries whereas Pakistan only provides 21% gas. Yet we are blamed for low export performance, which is highly unfair because we are being asked to deliver without ground realities being taken into account.” “In Bangladesh and India, domestic consumers are not the first priority, but it is the industries that are prioritised; this is a key factor behind its exports’ growth.”

“Industries bear high costs for gas, but they are denied supply. In contrast, domestic users pay only 30% cost and fertiliser sector pays 15%, while the remaining is completely borne by the industries, he explained.

Union of Small and Medium Enterprises (UNISAME) Chairman Zulfikar Thaver said, “To bring about economic growth, raise exports and employment, we need to give our industries first preference.”

“Domestic subscribers have alternate sources that can be utilised. Alternatively, household users could start rationing to give priority to the industries,” he opined.

Questioning SSGC’s plans to lay pipelines, Motiwala said, “Why are pipelines being laid down when there is no gas available? Instead of laying new pipelines, SSGC should replace the old, rusty pipelines to prevent gas leakages and bring down the exorbitant unaccounted-for gas (UFG) losses,” he suggested.

He also expressed concerns about SSGC’s petition carrying calculations about its revenue shortfall and expenditures at a high dollar value of Rs231, despite the finance minister’s assurance of bringing the dollar value to less than Rs200.

Energy Sector Expert, Abdullah Umer said, “The Sui Northern Gas Pipelines Limited (SNGPL) has to include a head cost of gas at the rate of Rs800 per mmbtu, while SSGC incurred Rs632 per mmbtu for the cost of gas.”

Published in The Express Tribune, November 22^nd, 2022.

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