The All Pakistan Textile Mills Association (APTMA) Southern Zone has described the Economic Coordination Committee (ECC)’s decision to hike gas tariffs for captive power plants as ‘disastrous’ for the export-oriented textile industry.
Describing the decision to hike tariffs from Rs. 3,000/mmbtu to Rs. 3,500/mmbtu as “anti-textile exports,” the trade organization noted the textile industry was responsible for 60 percent of exports of the country.
In a statement, APTMA South Chairman Naveed Ahmed claimed the 16.7% increase to gas tariffs for captive power plants would prove the final nail in the coffin of the export-oriented textile industry already facing numerous challenges. Maintaining the textile sector was the backbone of the country’s exports, earning much-needed foreign exchange, he said it also employed millions either directly or indirectly.
Ahmed noted the past two years had seen a 311 percent hike to the gas tariff, rendering the export oriented textile industry uncompetitive in the international market by raising operational costs amidst heavy taxes and high interest rates. He warned the captive power decision would make it difficult to achieve the export revenue target envisaged in Prime Minister Shehbaz Sharif’s Uraan Pakistan program, while also costing the country hard earned exports markets.
The APTMA leader said the industry had invested billions of rupees to set up gas-based power plants to ensure uninterrupted electricity generation, as distribution companies in Sindh and Balochistan lacked the capacity and capability to provide required loads of uninterrupted electricity. He claimed the government’s attempt to push the industry toward the national grid did not reckon with the poor capacity and inconsistent supply of Sindh and Balochistan’s electrical networks.
Ahmed further noted the government had only increased the gas tariff of captive power plants, while leaving the prices of other sectors unchanged. This targeted discrimination, he stressed, was unacceptable and hence rejected. The APTMA official demanded the federal government reverse its decision to boost the international competitiveness of textile exports, lamenting it was continuously being eroded by the past two years’ surge in energy prices.