Zubair Motiwala urges to shun SSGC’s request for hike in gas prices

Chairman Businessmen Group (BMG) & Former President Karachi Chamber of Commerce & Industry (KCCI) Zubair Motiwala has urged that this was not the right time to increase gas prices hence, the gas price hike request must be straightaway rejected while the SSGC should come up with pragmatic ideas to deal with its revenue shortfalls instead of requesting any increase in gas prices.

“The industries have already been through severe crises and are now in a takeoff position as they have invested heavily in improving their production by installing new machineries hence, any increase in gas prices should be deferred for a period of at least six months”, he added while speaking at a public hearing organized by Oil & Gas Regulatory Authority (OGRA) here in a local hotel on Monday.

“On one hand, the government encourages to go for industrialization and import substitution and also provides finances at 1 percent mark-up on imports of machineries but how can the industries run all these machineries when they don’t have any gas available to them”, he asked, adding that the industries remain deprived of gas in Site area since November 11 and the situation must also be the same or even worse in other industrial zones of Karachi.

He pointed out that in yesteryears a total of 211 mmcfd gas, which has now depleted to 180 mmcfd, was erroneously given to SNGPL from Sindh’s gas resources. It was high time that this gas must be returned to Sindh which despite producing 76 percent of country’s overall gas remains deprived.

Chairman BMG said that 54 percent of the exports were taking place from Karachi which contributes 68 percent revenue and recently more than $3.5 billion have also been invested here on installation new machineries which would certainly give rise to the exports and generate employment opportunities. “The newly installed machineries have in fact reduced gas consumption which stands stagnant at the same level of not more than 380 to 400 mmcfd since 2015. Due to heavy investment on machineries and equipment, the production has risen by 24 percent and gas consumption by industrial boilers has also reduced by 20 percent while the gas utilization by captive power plants has also gone down by 3 percent yet the industries suffer badly due to gas suspension.

He noted that the industries and CNG stations in other provinces, who have been receiving Sindh’s gas, remain fully operational throughout the week and we remain deprived. The energy being consumed by the industries in Karachi was much lower as compared to what was being consumed by the industries in the northern areas who export 46 percent while Karachi based industries have been exporting 54 percent by utilizing lesser electricity and gas. “As we are more efficient, we must be given preferential treatment in terms of energy supply”, he added.

Zubair Motiwala also stressed that the subsidy being provided to domestic and fertilizer sectors should not be taken from the industries and it should be provided by the government itself by allocating funds in the budget. “Why this cross-subsidy is being charged from the industries and then forwarded to domestic and fertilizer sectors which happens nowhere around the world.”

Referring to Baluchistan’s official UFG of 32 percent and 80 percent losses due to non-payment of bills against gas consumption, he suggested that SSGC must also follow the similar strategy adopted by KE which carries out load shedding in those areas where electricity theft was the highest. “Instead of depriving the industries, SSGC should carry out load shedding in those areas where gas theft is the highest and the recovery is the lowest.”

He also suggested to end SSGC’s monopoly by creating distribution zones and giving the task of supplying gas to consumers in these zones to other players while the SSGC should remain confined to supplying bulk gas to the new players only.

To efficiently deal with gas crises, Zubair Motiwala further recommended that the domestic consumers should be compelled to switch to solar geezers which can be provided by SSGC while the cost of these geezers can be recovered through gas bills in the form of monthly installments for up to 10 to 12 months.

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