Trade Bodies Reject Decision of Government of disconnecting Gas to Industry

Karachi: The industry will face the ever severe situation in the wake of discontinuation of gas supply to captive power generation for general industry from 1st February and the export-oriented sectors from 1st March 2021 leaving a severe impact on the economy and exports of Pakistan.

This was stated by Mian Nasser Hyatt Maggo, President FPCCI addressing a highly attended Press Conference. The President FPCCI accompanied by President Karachi Chamber of Commerce and Industry Shariq Vohra, President Employees Federation of Pakistan, Ismail Suttar, Vice Presidents FPCCI Mr. Ather Sultan Chawla, Mr. Nasir Khan, Mr. Hanif Lakhani, Khurrum Sayeed, Zubair Motiwala, Javed Bilwani, Junaid Makda, Zain Bashir, Asif Inam, Haroon Farooq, and Chairmen of all Town Associations vehemently rejected the cabinet decision and appealed Prime Minister to revisit this decision in the best interest of the survival of the industry and for enhancement of Pakistan’s export and creating employment in the country.

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He further went on to say that the industry is already confronted with many challenges particularly with respect to the procurement of long-term orders for the exports. However, Pakistan’s exports when witnessing a growth this decision has badly affected the confidence of foreign buyers and asking for completion of their orders and it is apprehended the export orders are likely to shift elsewhere to the other competing countries. He also quoted that Pakistan’s utility tariff is comparatively very high than the other regional countries.

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He further said that transferring electricity from captive power to the grid will take time and costly not feasible as the cost of electricity generated by our captive powers is lower than the cost involved in shifting to the grid. Most of the industries were running on natural gas using boilers and regeneration systems so it was impossible to be converted on the grid and change the whole appliances within one month.

Mian Nasser Hyatt Maggo stated that the decision of the Cabinet Committee on Energy (CCOE) appears to have been taken on non-professional advice and without consultation of main stakeholders that is businessmen and apex bodies. He further said that this decision will not only harm the economy of Pakistan but will also damage our image with international buyers which seems a conspiracy against the progress made by Pakistan in the last two years by the present government.

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He also criticized IPPs agreement signed in the past and said that the decision of the CCOE doesn’t fully clear to the Prime Minister about the severe impact. The Prime Minister would have not allowed this decision if he was presented the whole picture. The Prime Minister’s vision of 10 million jobs was on the basis of the industrial expansion by the private sector that the public sector could not generate such huge employment. This decision will also damage the vision of providing 10 million jobs and enhancement of exports and industrialization.

While addressing the press conference, Mr. Shariq Vohra, President Karachi Chamber of Commerce and Industry, and Mr. Zubair Motiwala showed surprise at the decision and stated that they would not be allowed K-electric to sabotage Karachi’s progress and development and both representative from Karachi Chamber strongly emphasized that government should not take such decisions that create labor unrest due to closures of factories.

They mentioned that Government reports that recovery from industry is 97 percent and further told that the problem is not the electricity generation rather it’s distribution through grids as we have obtained significant generation capacity while for the last several years the government didn’t enhance grid capacity and necessary measures to address distribution, transmission and line losses and electricity theft.

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The press conference was also informed that the previous government signed an agreement with IPPs in dollar terms when the dollar was lower at nearly Rs. 90 while now it is Rs.160 due to depreciation which is also causing losses.

Mr. Shehzeb Akram, Sr. Vice President FPCCI feared that the suspension of natural gas to industries would affect the exports and employment and stated that the business community is ready to discuss this matter with the government. Maximum industrial units have been closed for the last 15 days especially ceramic units.

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The government on the one hand providing construction industry packages/amnesty to boost economic activities and on the other hand, creating hurdles to the construction and allied.

Mian Nasser Hyatt Maggo, President FPCCI urged the government to review the decision as the economy can’t sustain such an unfavorable decision at a time when global slowdown prevails. He further suggested that before taking such decisions in business sectors, FPCCI should be invited.

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