Punjab textile industry will not get gas from December 1

Sui Northern Gas Limited (SNGPL) has reportedly expressed its inability to supply 150 MMCFD system gas to Punjab-based textile industry for at least two and half months starting from December 1, 2017, well informed sources told Business Recorder. Sharply reacting to the SNGPL decision, All Pakistan Textile Manufacturers Association (APTMA) has stated that this decision will further add to the exorbitant cost of doing business in Punjab by forcing its export industry to more expensive RLNG.
The price of RLNG for November 2017 has already reached over $ 9.5557/ MMBTU (equivalent Rs 1,006.45 per MMTBU). System gas is available in other provinces at Rs 600 per MMTBU for 365 days a year. "This decision, if implemented, would unfortunately reverse the export growth of approximately 8 per cent achieved in the first four months of current fiscal year," said APTMA.
Last year, the Petroleum Ministry ensured 28 per cent gas quota during winter to Punjab enabling its industry to use combination of system gas and RLNG to reduce the inherent price discrimination.
Recently, the chairman APTPMA at a meeting presided over by the Minister for Commerce and Textile, Pervaiz Malik, said that the provincial disparity of gas prices should end.
According to him, there is coal tax, caustic soda tax etc and no system of adjustment; he proposed zero rating to be extended.
The chairman APTMA pointed out that when GIDC was imposed the matter was taken to court. Later, the industry started paying GIDC; however, still notices are being received for previous payments. He maintained that the amount of pending GIDC, in majority of cases is more than the total worth of the processing factory.
He suggested that RLNG prices should be equal to system gas prices. He also said that every year the government has been increasing the wage rate, however, textile industry''s turnover and profits have not been increasing to accommodate such an increase. Regulatory duties have been imposed on dyes and chemicals.
The Federal Minister for Commerce and Textile argued that the government has already taken bold steps to reduce cost of doing business. He said that the government has limited resources and within those limitations the ministry has to develop its proposals.
He further stated that a meeting would be called to finalize the proposals of the textile sector and then these matters will be taken up with Prime Minister Shahid Khaqan Abbasi.