Industrialists have expressed grave concern over the decision taken by the government to cut gas supply to all industrial units from February 2021, terming it a counterproductive move.

In a statement, North Karachi Association of Trade and Industry (NKATI) President Faisal Moiz Khan, while opposing the decision taken by the Power Division, urged the federal government and Minister for Planning, Development and Special Initiatives Asad Umar to immediately withdraw the decision.

Labelling it as unwise and anti-industry move, he requested the government not to make decisions that would hamper production activities, otherwise industrialists would stop relying on government policies and would be reluctant to invest in future.

“This will negatively impact cement, chemical, packaging companies and other industries as their cost of production will increase substantially,” said Topline Securities Deputy Head of Research Shankar Talreja while talking to The Express Tribune.

Furthermore, in some cases, companies would increase prices of finished goods, which would put burden on consumers, he said.

The decision has been taken by the government in an effort to bring more industrial consumers to the electricity grid but due to the high cost of grid, most of the industries will eventually shift to other fuel sources like coal, furnace oil or re-gasified liquefied natural gas (RLNG). Because of these factors, the government’s objective may not be fully achieved.

“This will be a disaster for the industries; the government should have planned the purchase of LNG in such a way that the industries do not suffer,” Employers Federation of Pakistan President Ismail Suttar told The Express Tribune.

Endorsing the views, Dawood Hercules Corporation Research Lead Karim Punjani said the government was giving preference to the residential sector.

“The main problem with gas in Pakistan is the wastage in domestic sector. If you look closely at household consumption, you will notice that gas is being wasted in all households,” Suttar said.

“Even during the summer season, geysers are switched on and there are very few households which take the trouble of switching to the pilot mode.”

Similarly, he said, “the same happens while cooking Roti as nobody reduces the flame at the time when stove is not being used.” The government should gradually increase prices for domestic consumers so that gas wastage could be controlled, he said. “For industries, gas is the lifeline and there are many industries which are not even connected to the grid and solely depend on self-generation through gas,” he said.

Punjani added that the government was considering cutting gas supply to the industry as the country was unable to secure LNG from the international market due to high prices.

The industrialist urged the government to manage the situation so that industries and its employees were not affected.

The NKATI president asked from where the industrialists would get power for their industries if the government did not reverse the decision?

He also questioned how the industrialists could rely entirely on K-Electric when the power utility was overloaded?

Published in The Express Tribune, January 21st, 2021.

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