Gas load-shedding: new challenge

The advent of summer or winter, year after year, ushers in fears in the minds of people of Pakistan - fear of power load-shedding in summer and fear of gas load-shedding in winter. This year is no different either.

While the people of Karachi have still not fully recovered from hours of power shutdowns, the government has said that Karachi, too, will suffer severe gas shortages this winter. Such is the fate of the people of the country and notably Karachi, even after seven decades - with successive governments in the meantime having spent billions of dollars in the energy sector - mostly aimlessly and largely driven by vested interests.

"Sindh will face a severe gas crisis during the upcoming winter season and Karachi and other parts of the province could possibly face a shortfall of 300mmcfd," a spokesperson for Sui Southern Gas Company (SSGC) said on Monday. The reason cited is: "SSGC is getting lesser gas from fields with low pressure due to low pressure at gas fields." It was further stated that Sinjhoro and Zarghun gas fields have been closed for annual maintenance work. One fails to understand why annual maintenance is scheduled in winters when gas is most needed.

According to reports, K-Electric, the sole power company in Karachi, could also face a shortage in gas supply during the winter season.

Most likely, Karachi will be facing power and gas load shedding this winter. Let's see where this leads to. Probably, more street protests. The issues of the gas sector are similar to the power sector's - poor governance, line losses, conduct of IPPs, power theft and more. While power theft has been under much focus of the government and media, gas theft has managed to evade such focus. The figures of gas theft are mind boggling and more severe than power. Unaccounted-for-Gas (UFG), which is the difference between total gas purchased and total gas accounted for as sales, is more than 10% but may go all the way to 60% in some regions and business sectors.

For years, both SSGC and SNGPL have been plagued by the growing incidence of UFG. Every 1% increase in UFG means that the regulator (Ogra), takes away Rs 1.2 billion from the gas companies' financial statements as a penalty, thus severely affecting their financial bottom line. The major contributory factor behind UFG that makes up a whopping 51% of the UFG pie is gas theft. It is a major menace since it causes an annual loss of Rs 50 billion to the national exchequer.

Prime Minister Imran Khan has recently directed a countrywide crackdown on gas thieves. In the past, a legislation was also promulgated that imposed heavy penalties on those offenders engaged in various types of gas theft with maximum punishment of 14 years and a penalty of Rs 10 crores. But, enforcement was weak. Some penalties were imposed, but as always, some small fish were only netted. At present, gas theft continues and consumers in domestic, commercial and industrial sectors, in direct violation of the Gas Sales Agreement, bypass domestic and industrial meters, utilise unauthorized connections, damage and tamper with gas pipelines. The result is that while the consumers with financial and political might prosper, the ones with no means continue to suffer. They, at best, vent their frustration through street protests.

Natural gas is the biggest source of primary energy with a share of 48% in Pakistan's energy mix. Pakistan can also boast of possessing one of the largest pipeline networks of nearly 160,000 kilometers for gas distribution and transmission in the world, serving more than 8 million customers. It is, therefore, incumbent on the government to save this once robust sector from sinking further.

(The writer is former President Overseas Investors Chambers of Commerce and industry)

Copyright Business Recorder, 2020