Industrial units: In a surprise U-turn, govt resumes gas supply

Two days a week supply to industry, but nothing for power, CNG sectors.

ISLAMABAD:

Caving in to the demand from the industrialists of Punjab – the voter base of the ruling party – the federal government has decided to resume gas supply to industrial units less than 48 hours after its suspension amid widening gap between demand and supply due to drop in temperature.

The decision was taken here on Thursday in a meeting, chaired by Finance Minister Ishaq Dar and attended by Water and Power Minister Khawaja Asif and Petroleum and Natural Resources Minister Shahid Khaqan Abbasi.

The meeting had been called in the backdrop of acute gas shortage in the country after a sudden surge in demand.

“It should be ensured that natural gas is provided to the industry so that it remains unaffected as it will protect the interest of employees working in the industrial sector,” said a brief statement issued by the finance ministry.

Meeting participants also agreed that the ministries of finance, petroleum and water and power would continue to maintain close coordination and monitor the situation.



“The industrial sector will get gas for two days a week,” said Dar while talking to The Express Tribune.

However, it was not immediately clear from where the government would arrange supplies at a time of soaring demand.

Speaking at a press conference, Petroleum Minister Shahid Khaqan Abbasi revealed that gas demand stood at 6 billion cubic feet per day while supplies were only 4 billion cubic feet, showing a gap of 2 billion cubic feet.

He said supplies in Punjab were not even sufficient to meet the demand from domestic consumers and the government could not cut off households for the sake of any other sector.

Earlier, Sui Northern Gas Pipelines Limited (SNGPL) stopped providing natural gas to all industrial units including captive power plants and compressed natural gas (CNG) stations.

SNGPL took the step without seeking the prime minister’s approval, though a gas load management plan had been sent to him for his nod.

The absence of gas infuriated the industrialists, who hit out at the PML-N government, terming the step anti-industry that would leave 700,000 people jobless.

First, they convinced Punjab Chief Minister Shahbaz Sharif, who in return asked the federal government to resume gas supply, according to officials.

It is not for the first time that the government has backed down. Recently, the finance minister admitted that they had accepted 26 demands of the industrialists, mainly pertaining to tax relief.

Gas shortages in Punjab have become severe after the 18th Amendment to the Constitution, which ensures preferential treatment to the gas producing provinces.

“Provinces where well head of natural gas is situated should have precedence over other parts of Pakistan in meeting the requirements from that well head subject to commitments and obligations as on the commencing day,” the constitution says.

As the industries have started receiving gas, power plants and CNG stations are still encountering problems. Gas supply to these sectors will remain suspended for three months and will be restored for only one day a week in March and April.

Published in The Express Tribune, December 13^th, 2013.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.