RISING DEMAND AND MISMANAGEMENT
EXPERTS ASSERT THE EXISTING GAS RESERVES CAN SUFFICE IF MANAGED EFFICIENTLY.
TARIQ AHMED SAEEDI
Jan 10 - 16, 2011
Government is satisfied with the gas scenario at least in Sindh, claiming that there is no shortage of gas at all in the province. Minister for Petroleum and Natural Resources Syed Naveed Qamar reportedly said neither there was any shortfall in supply and demand of gas nor there occurred gas load shedding in Sindh. He apprised Sindh Chief Minister Syed Qaim Ali Shah last week of several ongoing schemes pertaining to supply of gas to the un-served, particularly, rural areas. Upon completion, thousands of people will have access to natural gas, he claimed.
In the country as a whole, people in the industrial circle are raising question on the way the government is managing gas crisis. If there happens to be gas shortage, impartiality is the best way to cope up with situation. It does not make sense to many that why the government has decided to suspend gas supply for two-day a week to CNG stations at the critical time when massive hike in petroleum prices is all set to make terrestrial travelling a luxury. CNG association has blamed the government for pampering urea production industries at the cost of CNG industry. It was not the first time when finger was pointed to the favouritism the government showed towards blue-eyed urea production plants in supplying of gas. Cross-subsidy has remained an industrial bone of contention since the demand of gas outstripped supply in the system. This time around, it was supply of gas to private urea production plants by the government that came under criticism of the association. CNG dealers said the gas supply to some urea production companies, captive power plants, and cement manufacturers were supplied round the year at their expense. Their business is deteriorating day by day and with that, consumers are suffering. A nine-month gas supply to these industries is said sufficient to keep their productions on rolling. The preference could not even produce desirable outcomes for the domestic and industrial sectors. Take electricity for reference. Electricity shortfall has not subsided despite seasonal change in consumption and albeit supply of gas to the power plants, the country's overall (winter) gap has touched more than 2000 megawatts.
CNG sector has become an important component of transportation in the country with a large numbers of vehicles depending on the relatively cheapest source of fuel. According to an estimate, around 3.5 million vehicles are run on CNG in Pakistan. The figure constitutes significant share of the total vehicles plying or roads nationwide. Most importantly, it is a popular fuel for economic transportation in the absence of any other economic substitutes to petrol and diesel.
Gas crisis nationwide has assumed an alarming proportion. Along with the industries that are reeling from gas outages, households in some places in Punjab have also been cut off from gas network. Gas shortfall rose to the level of 600 to 900 million cubic feet per day. Until Sunday last week, gas supply to industries in Faisalabad and Lahore could not be restored for consecutive three days, reported South Asian News Agency (SANA).
Situation in Karachi is different because of the very reason of management which Sui southern gas company commands to keep the gas flow uninterrupted to industrial units as well domestic consumers. Infrequent gas outages that, however, some domestic customers report, are still rare while industries do not complain of broken supply at all. The southern gas supplier's edge over its northern counterpart is also because of the coverage area of the latter that expands to entire Punjab, the largest province in terms of population, and Khyber Pakhtunkhwa. The recent floods wreaked havocs with the gas supply infrastructure and gas fields causing heavy monetary and supply losses to the Sui northern gas company.
It is the consensus of the experts that the government needs to devise energy plan to utilise and equitably distribute gas around the country in order to meet the rising demand of prime energy prudently. Especially such plan is to zero in on getting unexplored fields in to operation. It is interesting to note that contrary to general perception that country's gas reserves have been depleted, Pakistan is still rich in gas resources. An estimate says total gas production in the country stands at four billion cubic feet per day whereas approximately proven reserves are not less than 33 trillion cubic feet. If made to use, it is obvious it is sufficient for the energy requirements for many years. But, at the same time, demand of gas is rising rapidly and if not taken care of will turn up gigantic to eclipse explored reserves. Analysts stress on the importance of minimising unaccounted for gas and line losses owing to poor infrastructure, to make use of local energy in a better way and for long-term. Current line losses are approximated at nine per cent of the total production, which is significant in accordance with any definition of fair use of energy, and above all, a loathed profligacy on the part of ignorant and compromising government. It is worthwhile to note that if the demand keeps on rising with the similar rate, nevertheless entire reserves are tapped, the country would confront with yet an enlarged gap of two billion cubic feet per day by 2014 and six billion cubic feet per day by 2020.
The sooner the policy makers take serious this mathematics the better. GDP Growth for this year is projected to be little over two per cent. Industrial production is declining mainly due to energy shortage raising doubts about the revenue targets.
Unfortunately, the economy is on the oxygen pumped by international financial institutions and donors, unquestionably because of blithe exploitation of resources, both natural and manmade. Mismanagement and narrow-mindedness aggravated the process.
There is an urgent need of tax reforms and mobilising of revenue from primarily rich tax evaders to contain fiscal deficit at 4.7 per cent of gross domestic product, which seems very difficult. Fiscal deficit may likely to surpass 7.6 per cent, according to the media reports.