- Textile body says if urgent measures are not taken to reinstate the RCET, trade deficit could increase by $4-5 billion
All Pakistan Textile Mills Association (APTMA) on Thursday urged the government to reinstate the Regional Competitive Energy Tariffs (RCET) for gas at a rate of $9/MMBtu and for electricity at 9 cents/kWh in the upcoming budget.
In a letter to Finance Minister Ishaq Dar, dated June 8, 2023, the textile body raised concerns regarding the inclusion of an appropriate budget for the provision of Regional Competitive Energy Tariffs (RCET) for export industry.
The textile body warned textile exports could fall further by $5 billion in the absence of competitive energy tariff.
“The consequences of non-provision of competitive tariffs will be severe and could result in substantial closure of the industrial sector, widespread unemployment and further depletion of our vital export revenue stream,” said APTMA.
The textile body said that Pakistan was well on track to achieving a remarkable $26 billion in textile exports by FY-23.
“However, the withdrawal of RCET, short supply of energy, liquidity and L/C opening issues reversed this momentum,” it said, adding that the textile exports have seen a shortfall of greater than $3 billion, with exports for the year clocking in at only $16 billion.
“If urgent measures are not taken to reinstate the RCET, this deficit is expected to increase by a further $4-5 billion in the coming fiscal year.
“We urgently request you (Dar) take immediate action to reinstate the RCET for gas at a rate of $9/MMBtu and for electricity at a rate of 9 cents/kWh in the upcoming budget.
“Particularly, emphasising that the reinstatement of the RCET for electricity is crucial for mitigating the challenges faced by our industries and to some extent mitigating the inter-provincial disparity,” said APTMA.
The body added that the loss of approximately $10 billion in exports per annum is a consequence Pakistan simply cannot afford to bear.