Gas crisis generating unemployment

Textile sector of Faisalabad, ‘The industrial capital of Pakistan”, which was finding it hard to cope with four-days weekly gas cut, had another deadly blow this week when the SNGPL authorities were unable to restore the gas supply to the industrial sector on the fifth day. As the industry has been gripped in an unspecified gas load shedding schedule, the analysts say that the closure of more than 600 industrial units in the textile capital of Pakistan might lead to an immediate large-scale unemployment in the region, where 4 million people are directly or indirectly attached to the textile manufacturing trade.
Earlier, the textile exporters, industrialists and labour rights campaigners have taken up a strong united stance to urge the government to immediately stop discrimination in gas supply to upcountry industries, as 4 days a week suspension of gas supply has forced closure of industrial units, rendering thousands of workers unemployed.
The city has recently been turned into a hotbed for the protestors of all kinds. For instance, the workers who lose their daily wage due to a gas holiday usually take the protest route to ventilate their anger against the state. But it is a serious dilemma for the authorities that if they restore the gas to the industry, resulting in low pressure to the domestic consumers, the same lot of workers will return to the streets to fight for another cause.
It is pertinent to note that in the priority list of gas supplies, industrial sector stands next to the domestic consumers which are the top priority. In order of priority, the government’s distribution of natural gas ranges from domestic consumers, industries, Independent Power Producers (IPPs) and fertiliser factories. It is significant to note that local industrialists had announced to defy a ban this month and tried to run their industry forcibly, but Sui Northern Gas Pipelines Limited (SNGPL) stopped the total supply to the domestic and commercial sector in the industrial city, causing severe problems for citizen as well as restaurants, tandoors and other commercial consumers. At the joint call of Pakistan Hosiery Manufacturers and Exporters Association (PHMA) North Zone, Faisalabad Chamber of Commerce and Industry, Pakistan Textile Exporters Association, All Pakistan Bed Sheet and Upholstery Manufacturers Association, Khurrianwala Industrial Estate, Millat Industrial Estate, All Pakistan Textile Processing Mills Association, industrialists, textile exporters and industrial workers staged demonstration at all entry points of the city and raised slogans against the federal government. The speakers alleged that the wide scale mismanagement is yielding negative impact on the national economy and hurting industrial investment of billion dollars, which was being sinking. They raised slogans demanding immediate action by the government to stop discrimination in gas supply.
In the broader spectrum, the gap between supply and demand of natural gas has reached nearly one billion cubic feet per day mark (bcfd) resultantly the management is forced to cut gas supply for industrial sector of Punjab and CNG sector of Sindh. However, the situation is likely to deteriorate in the coming months due to increase in the intensity of cold. According to the petroleum ministry estimates, natural gas shortfall against committed supplies remained around 911 million cubic feet per day (mmcfd) in December and will increase up to 1.1 MMCFD in January 2012 and 1.4mmcfd in February, before easing down to 726mmcfd in March. It is unfortunate to forecast that the problem is likely to worsen in the coming years. According to official estimates, gas shortfalls are estimated to reach 2.5 BCFD in 2014-15, 3 bcfd in 2015-16 and 3.5 bcfd in 2016-17. The gap is estimated to peak at 5 bcfd by 2020-21, unless major discoveries and field developments are made in the coming years.
The consumption of gas has increased from the year 2,000 onwards on a massive scale. Initially, domestic users were consuming 32 per cent of the total gas supply, general industries 24.9 per cent, power sector 22 per cent, commercial users 5 per cent, and the CNG sector 4 per cent. However, the ratio has now changed with domestic consumers consuming 26.07 per cent, power sector 15.9 per cent, CNG sector 11.85 per cent, fertilisers 7.82 per cent, and the commercial sector 4.75 per cent.
According to petroleum ministry estimates, Pakistan’s domestic gas production is expected to fall from the current 4 billion cubic feet per day (cfd) to 2 billion cfd by 2020. Demand, on the other hand, is expected to soar to 8 billion cfd by that time, creating a 6 billion cfd shortfall.
Pakistan is losing 300 mmcfd of gas due to theft and leakages, causing Rs20 billion loss to the gas companies in unearned revenues alone, admitted Rashid Lone, managing director of Sui Northern Gas Pipelines- the second of the two government-owned gas distribution companies.
Textile leaders indicate time and again that government was intentionally creating hurdles in smooth running of the textile industry by minimising the gas pressure. They argue that the situation in textile industry has become horrible due to poor gas supply by SNGPL and the government should immediately settle this chronic issue of gas supply after taking all stakeholders into confidence. They also demand that the government should honour its commitment to avoid devastating impact of gas curtailment for textile industry and should review its priorities on gas supply immediately, to save the value added export oriented and labour intensive textile industry. The government seems to stay calm, composed and totally un-phased of all the hue and cry from the stakeholders. It is an objective fact that in the current global scenario and stiff international competition, exporters are struggling hard day and night, despite heavy odds against them battling to toe the line and meet their export commitments with stringent demands from their foreign buyers. But unfortunately, it seems that the government does not care as to how important it is for the exporters to earn the much needed foreign exchange for the nation.
Rehan Naseem Bharara, Vice Chairman FCCI, said that government still could not develop long term strategy and planning to tackle gas crisis, which is putting an adverse effect on the production. Especially, exporters of textile would face a lot of problems, because they would not be able to produce and export textile products in the given time frame. Renowned businessman, Mian Aftab Ahmad, warned the government to reschedule the gas load management plan otherwise, large number of industrial units would be shutdown and thousands of labour and their families would be deprived of their bread and butter. Leaders of textile industry also appealed the government to immediately intervene in this high time and save the textile industry by immediately stopping gas shedding and discrimination.
It is abundantly clear that due to gas load shedding and low pressure, people including labourers, and daily wagers have faced huge problems and remained jobless because productions of factories and power loom units had halted. Power looms owners were not getting the sized yarn beam from textile sizing factories for starting production of cloth, while huge stocks of cloth were piled up in the premises of the textile processing and printing mills, where gas is not available. Power loom units were not using gas directly, but thousand of looms remained closed due to breaking of the textile chain because of the freezing of textile sizing sector. Consequently, due to prolonged gas shedding, hundreds of labourers, most of them daily wages, suffered from gas load shedding which has left them penniless as they are struggling to generate income from other ways. Almost all manufacturing activities have already been frozen because of mismanagement and unfriendly course of action of the present regime, while the worst gas shortage threw more fuel to the fire. Lately, the labour unions have also expressed grave concerns over the prevailing situation, which is generating unemployment and poverty in the province. Almost all the textile manufacturing and export organisations have strongly criticised the SNGPL for its mismanaged gas supply to the textile industry, causing a colossal loss of over Rs50 billion, so far besides affecting direct employment of about 350,000 labourers across the Punjab.
In this whole episode, the government has not demonstrated a will and vision to address the issue that has pushed the textile sector to the brink of collapse. Instead of announcing a relief or showing a figment of sympathy towards the industry, the authorities have stated time and again that industrial consumers should realise that they had agreements for 9-month gas supplies and were required to use alternative fuel like, furnace oil during winter. The ruling elites think that the industrialist should stay away from blackmailing the government through their shutdown or lay-off threats.