Ahmed Khan Malik

Karachi industrialists have demanded that the top priority in respect of gas supply must be given to the mega city’s industry in the upcoming winter season for it contributes 54% to overall exports, provides the highest urban employment and generates the highest taxes for the government.

They argue it is highly unfair that the government has accorded the priority to the domestic sector in terms of gas supply on subsidised tariff through cross-subsidy by charging a high rate of gas to industrial consumers. They said the industries, which were ranked below in the priority list, remain starved for gas, which was the most essential raw material throughout the year, particularly during winter.  Bashir Nadeem, a leading industrialist in SITE Area, said it was an irony and highly unfortunate that industries that provided cross-subsidy for gas to the domestic sector lacked priority in respect to gas supply.

Talking to WealthPK, he demanded that the industries should be accorded the top priority in the list of gas supply. “It is a global fact that any country which does not give importance to the industrial sector cannot grow economically.” Nadeem said it was also worth noting that a major portion of subsidy given by the industrial consumers was enjoyed by domestic consumers, who actually could afford the higher domestic tariffs. “The population living below the poverty line doesn't use domestic natural gas, but wood or LPG, while currently indigenous natural gas is used in the domestic sector in bungalows, houses and flats owned by the upper-class in urban areas,” he pointed out.  “Slowly and gradually, the gas consumption of domestic consumers has come almost on a par with the consumption of industrial consumers,” he said.

Naveed Baig, an industrialist in Korangi Industrial Area, said that Pakistan may consider the gas price model of Bangladesh for according ‘fair treatment’ to all sectors. “The Bangladesh model charges domestic consumers as per gas burner, while in Pakistan, domestic consumers are charged for gas consumption through gas metering. The UFG (unaccounted for gas) in Bangladesh is much lesser than in Pakistan.” Baig urged the government to take drastic steps to conserve gas and utilise it for ‘productive’ consumption only. “The government should introduce a fair policy to put geysers on solar or electric power.” He was of the opinion that politicians, who want to give priority to the domestic sector, must understand that the economy’s strength lied in exports and people’s survival depended on the employment provided by the industrial sector.

The Korangi industrialist demanded that the government must give preference to the industry and phase out the cross-subsidies. “The gas charges for domestic, fertilizer and other sectors should be rationalised. There should be some other mechanism to provide relief to households. Gas tariff for the industry should be reduced to make it compete with regional competitors. It should be made mandatory for gas companies to provide gas in required quantum, pressure and price to the industry.” Baig said globally industry was supplied natural gas on a priority, and domestic and commercial sectors were provided LPG, but in Pakistan it was the other way round, and precious natural gas was being supplied to domestic and commercial sectors at the cost of industries.

Credit: INP-WealthPk