Production Disruption: Export industry denied gas for second time in a month

By Staff Reporter

ISLAMABAD: The exporting sector’s gas supply has been choked for the second time within a month, which industry officials say disrupts production cycle of textiles, causing delays in delivering international orders, thus slowing down inflows of export proceeds.
“Due to acute shortage of natural gas, supplies to the textile captive power consumers are being suspended in all regions from midnight for a week –from July 01, 2022 to July 08, 2022,” said Sui Northern Gas Pipelines (SNGPL) in a communication to the export industry on Thursday. .
While commenting on what an industry representative called a massive energy challenge, he was visibly perturbed over the unreliable energy supplies affecting captive power plants. How intense the energy crisis has been in the country can be gauged from the fact that shortage of natural gas unfortunately tends to intensify right in the middle of otherwise low-demand summer months. More worryingly, power supply also becomes variable due to 9,000mw or 35 percent plus shortfall against the demand in the country.
Earlier on June 02, 2022, the industrial sector that had been exempted from gas cuts got a direct hit in the shape of curtailing supplies to captive power plants. Before snapping supplies fully, the gas quota of the export-oriented industrial sector was reduced to one-third, which invited severe criticism from the textile sector.
The domestic gas/ Regasified Liquefied Natural Gas (RLNG) availability issues continue to plague captive plants of the export sector. The gas consumption quota of the industry hardly resumed from 50 percent to 100 percent a week before. On June 21, 2022, SNGPL allowed Textile Captive Power Consumers to increase allowable daily consumption of gas from 50 percent to 100 percent of their average monthly consumption (September 21, October 21, & November 21). However, this relief was short lived and once again gas supply to industry has been choked for a week.
As energy supplies to top-priority export-oriented industry continued to get squeezed, an export target of $20 billion dollars for the textiles and apparel industry for FY 2021-22 may not be achieved, apprehended a representative of the industry.
It would greatly dent the government’s effort of earning foreign exchange reserves in a country like Pakistan, which is trying hard to get a loan from the International Monetary Fund (IMF) for bridging financial gaps.
Meanwhile, power shortfall officially recorded on June 29, 2022 at 9pm swelled to one of the highest levels of 8,002MW. It means the effective deficit at power distribution level surged to approximately 10,000MW, if technical faults and power shortage of K-Electric also factored in. However, with the reduction of mercury level on the back of pleasant weather since Thursday morning, the demand for electricity saw a reduction of 4,000MW to nearly 18,500MW.
An industry representative was of the view that the government should have continued gas supplies to captive power plants in view of lower demand of natural gas for power generation as electricity demand ebbed to great extent. He insisted that this period of low electricity demand was expected to continue for about two weeks at least. Hence, the government should have adopted a strategy to ensure sufficient gas availability to the industry.