Industries warn of massive layoffs after being notified of gas closure for over three months in winter

SSGC informs industries of gas closure from November 15 to February 28

Our Correspondent
A general view of the deserted hot strip mill department of the Pakistan Steel Mills (PSM) on the outskirts of Karachi, Pakistan, February 8, 2016. — Reuters
A general view of the deserted hot strip mill department of the Pakistan Steel Mills (PSM) on the outskirts of Karachi, Pakistan, February 8, 2016. — Reuters

  • SSGC informs businesses of closure from Nov 15 to Feb 28.
  • Business associations warn of massive layoffs and closure.
  • “Gas closures can not be proved good for economy," they say.

KARACHI: Sui Southern Gas Company Limited (SSGCL) has sent gas closure notices for over three months in winter to industries in the city, which they rejected saying that gas outages would lead to massive layoffs and closure of businesses, The News reported Sunday.

“The industries are in a state of shock to receive SSGCL’s notices of gas closure starting from November 15, 2022, to February 28, 2023,” the Karachi Chamber of Commerce and Industry (KCCI) and seven other industrial town associations said in a joint statement on Saturday.

KCCI said it had made a committee on gas issue in collaboration with the town associations — including SAI, KATI, LATI, FBATI, NKATI, SSHAI, and BQATI — which had highlighted the issue of gas supply to the government in advance.

“The gas closures can not be proved good for the economy, especially this year, as no special arrangements have been made by the government to purchase RLNG to inject in the system.”

The committee said it was expecting appropriate measures from the government to ensure gas supply to the city’s industries, instead of complete gas outages, which would lead to a huge decline in exports and revenue, closure of industries, and layoffs.

The industries said they had floated a different proposal to a committee on gas matters formed by the government, and put suggestions to tackle the looming shortage of gas in winter. The notices issues to the industries covered none of them, they added.

According to KCCI, their committee had given an idea to the government of closing down the gas supply for two days a week in winter for every 12 hours. 

A suggestion was given for gas load management on a rotation basis to ensure the industrial production was not halted completely, and discussions were also held to close 50% of captive power plants, it stated.

'Utter contrast'

It continued that they had further suggested closing down captive power plants of the industries having proper power and electricity supply from Karachi-Electric.

It was also discussed that usage of gas shall be closed for CPPs whereas the gas must be ensured for operating the industrial boilers. Besides, other measures of energy conservation should also be adopted, the joint statement said.

“SSGC’s gas closure notices issued are also in utter contrast as it is not mentioned how the company will supply gas to export-oriented industries in winters, which is a priority sector.”

Rejecting the gas curtailment plan of the SSGC, KCCI and its affiliated seven industrial town associations asked Prime Minister Shehbaz Sharif and Chief Minister Sindh Murad Ali Shah to immediately intervene in the matter.

“If we compare it with Pakistan, Bangladesh has accorded priority to industry by supply 961 mmcfd, which is 34% share of total gas being supplied to the industries while in Pakistan, gas supply to industries is only 18% with a supply of 721 mmcfd only.”

The export industries of Karachi contribute to more than 54% of the national exports while the general industries of Karachi also cater to more than 50% of national needs, according to KCCI.

The joint statement demanded the government ensure the smooth running of the wheels of the industries and save them from a crisis by offering a rational plan of gas supply to the industries. 

They also claimed that the SSGC had issued the gas closure notices taking the government’s committee into confidence.