KARACHI: The government is in touch with Pakistan’s major exporters and industrialists to sort out a solution to the chronic gas shortage delaying production in the winter months, the parliamentary secretary for commerce, industries & production said on Sunday.
The government announced on Saturday it would import more liquefied natural gas (LNG) in January next year to meet demand, as
Pakistani industries continue to undergo a critical shortfall of gas due to supply cuts and low pressures in major parts of the energy deficient country.
“We are in contact with exporters and other industrialists. This is our responsibility, to sort out all their problems and we are doing this already,” Aliya Hamza Malik told Arab News.
Natural Gas constitutes 50 percent of Pakistan’s primary energy mix. The local production of gas has been stagnant at 4,000 million cubic feet per day (MMcfd) for almost 10 years as compared to the constrained demand of 6,000 MMcfd and unconstrained demand of 8,000 MMcfd.
Pakistan, chronically short of natural gas, diverts gas supplies toward its 220 million strong population in the winter by cutting down supplies to industries and power plants. This long-held practice disrupts the production activities of major industries which rely heavily on gas supplies to function.
“We are receiving complaints from industrialists all over Pakistan”, Sheikh Sultan Rehman, Vice President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) told Arab News on Saturday.
“Industries are facing low pressure and supply cuts and the situation is getting worse because even domestic consumers are facing problems,” he continued.
“Business activities are suffering due to the gas supply situation,” he added.
Industrialists from Karachi, Pakistan’s largest city and business hub, have said the gas shortfall is delaying export orders.
“The gas supply situation at the moment is really bad. The pressure is so low that the generators can’t be operated and the textile factories that need gas for processing orders are delayed,” M. Shariq Vohra, President of the Karachi Chamber of Commerce and Industry (KCCI) told Arab News.
Earlier this month, Abdul Razak Dawood, adviser to the Prime Minister for commerce, said the government had decided that there would be no gas outages for exporters.
But industry insiders say this is not the case.
“All of Pakistan’s industries, whether they are export oriented or not, should be treated at par and a uniform policy should be in place”, FPCCI Vice President Rehman said.
The gas supply situation is similar in Pakistan’s eastern and most populous province Punjab, where production facilities are suffering as temperatures plunge.
“We are facing difficulty at the domestic and industrial level. The routine supply of gas is disrupted, as there is a supply break of three hours each in the morning and evening,” M. Nasir Hameed Khan, Senior Vice President, Lahore Chamber of Commerce and Industry (LCCI) said.
“The government has assured (us) that they will supply gas for 24 hours from January 6,” he added
The South Asian country, which faces a 2,000 MMcfd shortage, meets its deficit through the import of LNG.
The petroleum ministry on Saturday said the government had arranged 12 LNG cargoes for Jan. 2021.
“One cargo that was scheduled for 30th December, and was intended to supply for January 2021, has been moved a few days ago into January. In addition, the volume has been increased in certain cargoes,” the ministry said in a statement.
The ministry said the country’s gas utilities were facing a more than 9 percent load increase after temperatures dropped in different cities.
With each 1-degree Celsius drop in temperatures, demand for gas increases by 6 MMcfd in the twin cities of Islamabad-Rawalpindi alone, according to the ministry.
The ministry said Pakistan will be moving 30 percent more LNG in January 2021 compared to January 2018, at the cheapest ever price of $6.34 (MBtu) for a peak winter month.
But former federal finance minister, Miftah Ismail, warned that in January the shortage would further intensify and said if domestic industry was not supplied, it could have a major economic fallout.
“Gas shortage will increase in January and they (government) are saying they will not supply gas to domestic industry, and if they will not supply... how will employment increase? Then how will tax be collected? And if you will not supply (gas) to the export industry, how will foreign exchange come,” Ismail told Arab News.
Pakistan government says in contact with businesses to 'sort out' chronic gas shortages
https://arab.news/gtew6
Pakistan government says in contact with businesses to 'sort out' chronic gas shortages
- Export processing factories facing delays in orders as gas pressures and temperatures plunge, industry insiders say
- Earlier this month, PM’s commerce adviser said the government had decided there would be no gas outages for exporters
Pakistan orders four-day workweek, shuts schools to save fuel amid Middle East oil crisis
- The development comes as ongoing US-Israeli strikes on Iran disrupt oil supplies in Strait of Hormuz, push prices past $119 a barrel
- Islamabad bans government purchases, cuts fuel allocation for vehicles as well as workforce in public and private offices by 50 percent
ISLAMABAD: Prime Minister Shehbaz Sharif on Monday announced austerity measures, including a four-day work week, cuts in government expenditures and closure of schools, to offset the impact of rising global oil prices due to an ongoing conflict in the Middle East.
Global fuel supply lines have been disrupted in the Strait of Hormuz, which supplies nearly a fourth of world oil consumption, after Tehran blocked it following United States-Israeli strikes on Iran and counterattacks against US interests in the Gulf region.
Oil prices surged more than 25 percent globally on Monday to $119.50 a barrel, the highest levels since mid-2022, as some major producers cut supplies and fears of prolonged shipping disruptions gripped the market due to the expanding US-Israeli war with Iran.
In his televised address on Sunday night, Sharif said global oil prices were expected to rise again in the coming days but vowed not to let the people bear their brunt, announcing austerity measures to lessen the impact of fuel price hikes.
“Fifty percent staff in public and private entities will work from home,” he announced, adding this would not be applicable to essential services. “Offices will remain open for four days a week. One-day additional off is being given to conserve oil, but it would not be applicable to banks.”
Sharif didn’t specify working days of the week and the government was likely to issue a notification in this regard.
He said a decrease of 50 percent was being made in fuel allocation for government vehicles immediately for the next two months, but they would not include ambulances and public buses.
“Cabinet members, advisers and special assistants will not draw salaries for the next two months, 25 percent salaries of parliamentarians are being deducted, two-day salaries of Grade 20 and above officers, or those who are paid Rs300,000 ($1,067) a month, are being deducted for public relief,” he said.
Similarly, there will be 20 percent reduction in public department expenses and a complete ban on the purchase of cars, furniture, air conditioners and other goods, according to the prime minister.
Foreign trips of ministers and other government officials will also be banned along with government dinners and iftar buffets, while teleconferences and online meetings will be given priority.
“All schools will be off for two weeks, starting from the end of this week, and all higher education institutions should immediately begin online classes,” he said.
Sharif’s comments were aired hours after Pakistani authorities said the country had “comfortable levels” of petroleum stocks and the supply chains were functioning smoothly, despite intensifying Middle East conflict.
Petroleum Minister Ali Pervaiz Malik said three oil shipments were due to reach Pakistan this week, state media reported.
Meanwhile, Pakistan Navy (PN) launched ‘Operation Muhafiz-ul-Bahr’ to safeguard national energy shipments, the Pakistani military said on Monday, amid disruptions to critical sea lanes due to the conflict.
The navy is conducting escort operations in close coordination with the Pakistan National Shipping Corporation (PNSC), according to the Inter-Services Public Relations (ISPR), the military’s media wing. It is fully cognizant of the prevailing maritime situation and is actively monitoring and controlling the movement of merchant vessels to ensure their safe and secure transit.
“With approximately 90 percent of Pakistan’s trade conducted via sea, the operation aims to ensure that vital sea routes remain safe, secure, and uninterrupted,” the ISPR said on Monday. “Currently, PN ships are escorting 2 x Merchant Vessels, one of which is scheduled to arrive Karachi today.”
