KARACHI: Traders dealing in generators have expedited imports, anticipating an increase in demand amid forecast of a more intense heat wave in the coming summer amid persistent energy shortages which are likely to worsen.

Earlier in September 2014, a similar trend of higher imports was witnessed, when forecast of a hotter summer in 2015 was made.

With petrol and diesel prices on the decline, a major demand for generators came from the builders of high-rise apartments and other mega project operators where standby generators are considered a necessity.

Surprisingly, the import of power generating machines has continued to crawl up ever since the PML-N government came into power in May 2013 with the promise of eradicating load-shedding in a few months.

Import of generators went up by 20 per cent in July-Dec 2015-16 to $791 million from $658m in the same period of 2014-15.

According to the figures of Pakistan Bureau of Statistics (PBS), import bill for generators swelled to $1.4 billion in 2014-15 from $1.1bn in 2013-14 and $959m in 2012-13.

Import in December 2015 stood higher with $182.6m as compared to $177m in November 2015 while imports in December 2014 were $163m. In October 2015, generator import bill was $118m while in September 2015 imports were just $95m.

This means the country has spent over $4bn in almost four years on generator imports.

Last year’s deadly heat wave, which claimed over 1,200 lives in Karachi, has caused demand and supply gap and dealers in various areas were charging an additional Rs 5,000 from consumers purchasing generators.

“I think the imports will grow in coming months in view of media reports suggesting that a more powerful heat wave is set to hit the city in coming summer,” Sikandar Shahzada, owner of Sikandar and Company at Shahra-e-Liaquat said. “Imports may cross $1.4bn mark by end of this fiscal year.”

Shahzada claimed that demand for generators has been going up from the industrial side as well as the builders’ side. The share of heavy duty generators is now 40pc of total imports which was 10-20pc last year, leading to a higher import bill.

A decline in diesel prices has led to a spike n demand for diesel generators which were overlooked earlier, he added.

Petrol-based generators are also in demand since the fuel prices plunged significantly. Around 2-5 KVA generators are popular in residential areas while industrialists use 20-500 KVA machines.

However, industrialists ruled out that they are the major consumers of power generating machines.

President Site Association of Trade and Industry, Junaid Esmail Makda said big industrialists are not buying too much while small and medium-sized units are procuring generators.

He claimed residential and commercial demand was more than the industrial sector.

“Industrialists feel that since gas tariff has gone up, the use of big generators is not feasible. Besides, the government has also imposed moratorium on new gas connections due to which no new connections are being given for captive power generation,” Makda said.

Another factor behind low demand for generators in industrial sector is a drop in load shedding by K-Electric for the last few months, he said.

President F.B. Area Association of Trade and Industry (FBATI) Abdullah Abid said running generator on gas has become more expensive than diesel due to increase in gas tariff, thus disturbing cost of production. As a result, industrialists are not focusing on buying generators.

However, load shedding is going on in the name of maintenance, system repair, etc, he added.

Published in Dawn, January 31st, 2016