‘Gas supply to KESC should not be at cost of industries’
The government is considering stopping 650 megawatts of power supply to KESC from its central system, but to offset this, it will increase gas supply by 100 mmcfd so that the power utility can produce equal amount of electricity for Karachi consumers.
However, analysts are not in favour of curtailing gas allocation for industries of Karachi, saying it will badly hurt the export-oriented industry.
If the government provides additional gas to KESC, it will have to reduce supply to CNG stations and industries in Karachi. This will increase gas load-shedding for industrial areas and CNG stations to two days a week from present one day.
The whole idea behind this exercise is to enhance power supply to Punjab, which has been the scene of violent protests in recent days over excessive power breakdowns.
“Diverting 100 mmcfd of gas to KESC will not make any difference for the company, but it will be positive for the country,” JS Global Capital analyst Atif Zafar said. “Industries in Punjab need gas and the government should divert more gas to them even if it has to cut CNG’s share.”
Similarly, the government should not reduce gas supply to Karachi industries even if it has to shut down CNG stations for two days in Sindh, Zafar suggested. “Industry should be the first priority because this is the best possible use of gas – a scarce commodity,” he said.
Farhan Bashir Khan, analyst at IGI Securities, was of the view that gas supply to CNG stations could be reduced, but industries should not be harmed. “Gas is now a scarce resource, as we are not finding new reserves. Gas should be used in industries rather than for CNG or power generation,” he said.
For power production, he suggested, the government should exploit water and coal resources instead of consuming gas and expensive furnace oil.
A KESC spokesperson stressed that the government cannot stop 650MW of electricity from the central system as it was covered in the privatisation agreement signed between the company and government.
However, the spokesperson said the plan would not hurt the company because it would produce the same amount of electricity from the additional 100 mmcfd of gas.
Commenting on the plan, a Sui Southern Gas Company spokesperson pointed out that the government was considering cutting gas allocation for CNG outlets and industries of Karachi as it had to divert 100 mmcfd to KESC.
Opposing the plan, Karachi Chamber of Commerce and Industry (KCCI) President Mian Abrar Ahmed said the industry would not accept two-day gas closure.
Published in The Express Tribune, June 27th, 2012.
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