If gas supply stays unstable, so will exports: BMG

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If gas supply stays unstable, so will exports: BMG
If gas supply stays unstable, so will exports: BMG

KARACHI:
Pakistan is struggling to achieve stability in its exports as volumes are steadily declining due to a lack of consistent gas supplies, industrialists and researchers say.

Speaking at a public hearing organized by the Oil and Gas Regulatory Authority (OGRA) on Monday, Businessmen Group (BMG) Chairman and former Karachi Chamber of Commerce and Industry (KCCI) Chairman Zubair Motiwala lamented: “ How can the government expect exporters to supply and compete with Bangladesh and India when they don’t have stable gas supplies?”

The public hearing on the Sui Southern Gas Company (SSGC) petition was chaired by Ogra Chairman Masrour Khan, and other participants included Ogra Oil member Zainul Abidin Qureshi and financial member Mohammad Naeem Ghori.

“We can increase exports by 50% within installed capacity, but this can only be achieved if there is gas supply in the required quantity and quality at a competitive price,” said the BMG president.

Referring to the Pakistan Energy Yearbook and the Bangladesh Economic Review, Motivala reported that “Bangladesh provides 34% of its industry’s gas, while Pakistan provides only 21% of its gas. However, we are accused of poor export performance, which is highly unfair as we are being asked to deliver without taking into account the real realities.” “In Bangladesh and India, the priority is not domestic consumers, but industries; it is a key driver of export growth.”

“The industry bears high gas costs, but is being denied supplies. In contrast, domestic consumers pay only 30% of the cost, while the fertilizer sector pays 15%, with the rest entirely borne by the industry, he explained.

Union of Small and Medium Enterprises (UNISAME) President Zulfiqar Taver said: “To ensure economic growth, increase exports and employment, we must prioritize our industries.”

“Domestic subscribers have alternative sources that can be used. Alternatively, home users could start rationing to prioritize industries,” he said.

Questioning SSGC’s plans to install gas pipelines, Motivala said: “Why are gas pipelines installed when there is no gas? Instead of installing new pipelines, SSGC should replace old and rusty pipelines to prevent gas leaks and reduce unaccounted for gas losses (UMZ),” he suggested.

He also raised concerns about the SSGC petition, which contains income and expenditure gap calculations in a high dollar value of Rs 231, despite assurances from the Finance Minister to reduce the dollar value to less than Rs 200.

Energy sector expert Abdullah Umer said: “Sui Northern Gas Pipelines Limited (SNGPL) should include Rs 800 per MMBtu of gas cost, while SSGC incurred Rs 632 per MMBtu of gas cost.”

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