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Saving gas for production

June 21, 2012


PAKISTAN is the largest consumer of CNG for transportation in the world, putting burden on the already short gas reservoirs in the country.

Almost 3.5 million vehicles run on CNG and wastes 500 mmcfd gas on transportation, which can be utilised for saving more than Rs300 billion by using it in productive sectors, such as fertiliser industries, textile sector and power generation.

By providing CNG from natural gas for transportation, the government only saves Rs50 billion of subsidy on petroleum but if the government utilises the same gas in productive sectors, it can earn up to Rs300 billion for the people of Pakistan.

Owing to curtailment of gas to fertiliser manufacturers for 180 days, Pakistan has to import fertiliser at double rate with more than Rs100 billion impact on national economy.

If gas is supplied smoothly to manufacturers, fertiliser will be produced locally, ensuring a saving of more than Rs100 billion annually. Farmers will get fertiliser on low rates, which will further lower the rates of food and basic commodities.

Pakistan has a reputation in the international textile market which has been shut down for the last few years due to hurdles in gas supply to textile industries which leads to under-production.

The textile sector has repeatedly been asking the government to reduce the gas curtailment, but there has been no response so far. If the government palliates hurdles in the gas supply to the textile industry, Pakistan can increase its export up to $4bn with Rs10m’s worth of job security to Pakistanis in the textile sector.

In the sweltering hot summer season, loadshedding doubles the trouble of daily life of the common man of a developing country like Pakistan.

Although cheap gas is produced, the government in order to produce electricity mostly depends on diesel or furnace oil, which costs Rs22 per unit instead of Rs5 per unit on gas.

The government gives fewer subsidies on petroleum and it is more attentive to providing CNG stations and local buses despite gas shortages.

We can save precious gas for productive sectors to boost our economy by giving more subsidies on petroleum.