All Pakistan Textile Mills Association, Southern Zone terms Economic Coordination Committee’s recent decision to increase gas tariff for Captive Power Plants from Rs. 3,000/MMBTU to Rs. 3,500/MMBTU Anti Textile Exports, which will prove disastrous for the export-oriented textile industry, has a 60 per cent share in the country’s exports.
Mr Naveed Ahmed, in a statement issued to the print and electronic media, said that the recent increase in gas tariff by 16.7% for the industries having Captive Power Plants and using gas for the generation of electricity to operate their mills is the last step in the coffin of the export-oriented textile industry which is already facing numerous challenges in the domestic as well as international market. He said that the textile sector, the country’s backbone, is earning much-needed foreign exchange and providing employment to millions of labour force directly or indirectly.
Mr Naveed Ahmed said that due to an astronomical increase of 311 per cent in gas tariff during the last two years, the export-oriented textile industry is becoming uncompetitive in the international market as the energy costs account for a large share in the price of production of textile goods, therefore with the highest energy cost in the region, the highest cost of borrowing and taxation, the Pakistani textiles will be uncompetitive in the international market. Hence, the recent decision to increase the gas tariff for CPPs will not only prove detrimental to achieving the target set by the Prime Minister of Pakistan for export growth in the Uraan Pakistan Program but would also cause the loss of hard-earned export markets.
Mr Naveed Ahmed said that industry had invested billions of Rupees in gas-based power generation plants for the generation of uninterrupted electricity for their consumption as the electricity supply companies in Sindh and Balochistan, like KElectric and HESCO, do not have the capacity and capability to provide the required load of uninterrupted electricity to the industry. He further said that the government is trying to encourage the use of grid electricity instead of electricity produced by gas-based Captive Power Plants without realizing that this policy is not implementable in Sindh and Balochistan due to poor capacity and inconsistency in the supply of grid electricity.
He noted that the government had only increased the gas tariff of CPPs, leaving all other sectors, including fertilizer, processing, and domestic, unchanged. This targeted discrimination is not acceptable and is hence rejected.
Mr Naveed Ahmed demanded that the federal government reverse its decision to increase the gas tariff by an unprecedented amount to make textile exports competitive in the international market, which has been continuously eroded by the surge in energy prices over the past two years.
