Pakistan’s Energy Crisis Double Trouble: Simultaneous Electricity and Gas Shortages

Posted on 17. Jul, 2009 by Ross in Asia, Textiles

Pakistan’s industrial leaders are being left with no energy sources to fuel their businesses, with rising popular pressure leaving the government clutching at straws.

Pakistan’s textile industry has been particularly ravaged by high energy prices and shortages of supply. National exports for last year fell 25% or US$5.12 billion short of targets, and this year’s forecasts have been substantially scaled back as well. Despite the current global economic recession, estimates place the losses due to energy prices at around US$1 billion annually, with failure to meet orders caused by the effects of energy shortages on production times driving away future business. Given that 60% of the country’s export earnings come from textiles, the crisis is of vital importance to Pakistan’s economic recovery and future.

Despair is growing amongst business leaders, who were aware of the massive electricity shortfalls Pakistan was due to face, but the simultaneous gas shortages are decimating their operations. The All Pakistan Yarn Merchants, Sizing Industry Association, All Pakistan Power Looms Association and All Pakistan Textile Mills Association have now formed an alliance named the Punjab Textile Front what is seen as indiscriminate load shedding, whilst traders are expected to go on strike on July 21st. All Pakistan Textile Mills Association Chairman Tariq Mahmood told Dawn.com after a meeting with the Textile Industry Minister:

There is even no plan in the pipeline where the government could seriously pursue to avoid the power outages for the textile industry

Much of the Punjab Textile Front’s anger is at the government’s continuing expansion of the gas network to households, despite the fact that gas supplies are insufficient for existing consumers. They also are calling for the government to start importing liquefied natural gas (LNG) in a move similar to neighbouring India.

Whilst the government is slowly attempting to install more power stations, belatedly pointing to a new 250MW generator in Faisalabad which will come online at the end of the month, businesses also worry about new taxes on raw material imports and imminent withdrawal of energy subsidies, forcing their effective energy prices even higher.

Image of a shoe shop with no lights on by Omer Wazir @ Flickr