KARACHI: All Pakistan Textile Mills Association (APTMA) has expressed its deep concern over the government’s decision to increase the captive gas price to Rs 2,750/Mmbtu and supply industry with a 35:65 domestic gas/RLNG blend, taking the price of captive power generation well above regionally competitive levels.
Aptma said the international competitiveness of Pakistan’s textiles and apparel exports is being continuously eroded by ever-increasing energy prices that are over twice those in competing regional economies. Production at these rates is not financially feasible and we are rapidly losing market share to countries like Bangladesh, India and Vietnam that have significantly lower energy tariffs.
The government wants to shut down captive generation by making it unaffordable. With grid electricity price at over 16.7 cents/kWh, there is no financially viable source of energy for the industry to continue manufacturing with, it added. While the intent to streamline gas consumption is understandable, the transition must not jeopardize the textile and apparel industry’s viability. For the industry to remain competitive, provide employment, and earn foreign exchange, energy prices must align with regional benchmarks. The current scenario, where industry is made to cross subsidize other power consumers, is untenable and counterproductive to our shared goals of economic stability and growth.
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APTMA urged the Government to reconsider its stance on energy pricing for industrial consumers. A shift away from captive generation should be incentivized by removing cross subsidies from power tariffs for industrial consumers and bringing them down to a regionally competitive level of 9 cents/kWh. Moreover, B2B power contracts must be allowed with a use of system/wheeling charge of 1-1.5 cents/kWh for procurement of green energy at competitive endues prices that is necessary to maintain export competitiveness following the advent of the EU C-BAM and other green regulations.
“We stand ready to work closely with the Government to ensure that Pakistan’s textile and apparel industry remains a global competitor, providing jobs to millions and contributing to the country’s export and economic growth,” Aptma said.
Copyright Business Recorder, 2024
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