Industrial production suffers due to erratic gas supply: FPCCI

KARACHI: Mian Anjum Nisar, president of the Federation of Pakistan Chambers of Commerce and Industry, has urged the government to immediately ask the SSGC to restore gas supply with the required pressure to overcome the supply and demand gap of energy.

He said that the businesses and industries are already passing through un-conducive business conditions of high cost of inputs and deteriorating infrastructure.

The export industry after COVID-19 was recovering fast but unfortunately due to gas supply interruptions, followed by electricity shutdowns, the production of goods for export has suffered 30 percent reduction. The management of SSGC has failed to respond to complaints by industry in the last three months. There is no reason of short and interrupted supply of gas to industry which amount to only 350 MMCFD of total daily input of SSGC of 1450 MMCFD.

He said that the gas prices have been on the rise in the last couple of years making RLNG cheaper than local natural gas. He said that 1200 MMCFD of LNG import facilities are installed, 600 MMCFD each by ENGRO Vopak and PGPCL. At present, consumption of RLNG import, 300 MMCFD of un-utilized capacity, is available at PGPCL RLNG terminal.

Government should immediately arrange import of additional four cargoes per month of LNG to ensure that the industry gets required gas. He said that Pakistan produced around 4 billion cubic feet of indigenous natural gas per day (BCFD) against a demand for over 6 BCFD.

To meet the shortfall, the government has initiated the import of LNG. At present, the capacity of two Floating Storage and Re-gasification Units (FRSU) to Re-gasified Liquefied Natural Gas (RLNG) is 1200 MMCFD, but unfortunately only 800 to 900 MMCFD of RLNG is being imported.

The FPCCI president also said that the present local gas supply to captive power is at Rs1,021/MMBTU equivalent to $6.1/MMBTU while RLNG OGRA prices for distribution is approximately $6.5/MMBTU. For industry usage local gas prices and RLNG prices are the same.

Copyright Business Recorder, 2020