PESHAWAR; The Khyber Pakhtunkhwa Textile Mills Association (KPTMA) has said that the recent decision by the government to raise gas prices a blow to the textile sector of the country.
In a statement issued here, Kamran Shah, Chairman KPTMA expressed concern over the manifold increase in the energy costs and voiced grave apprehensions regarding the adverse impact of the government’s actions.
“The decision to hike gas prices by 14.58 percent within three months, coupled with a staggering 150 percent increase since January 2023, and overall increase of 222.77 percent from the rate of Rs. 852 per MMBTU applicable till 31st December 2022, has sent shockwaves through the textile industry, particularly in Khyber Pakhtunkhwa,” said the Chairman KPTMA.
He further stated that earlier in November 2023 Caretaker Government had increased gas prices by 118.18% as compared to the rate applicable from January 2023 and 181.69 percent from the rate applicable till 31st December 2022, these increase in gas tariff is beyond the absorption limit of the export-oriented textile industry and became uncompetitive in the international market as we cannot export inflation.
He added that increase in gas prices thrice since January 2023 has put an extra and unmanageable burden on the textile industry of Pakistan especially textile industry of KP due to which they lost their competitiveness in the international market and also lost their its share in the national market.
Shah highlighted the dire consequences of the gas price surge, revealing that half of the textile industries in Khyber Pakhtunkhwa have already ceased operations, with the remaining enterprises teetering on the brink of closure.
He said that the recent notification from the Oil and Gas Regulatory Authority (OGRA) announcing yet another gas price hike on February 15, 2024, has further exacerbated the industry’s plight, hastening its downward spiral.
Shah emphasized the government’s responsibility to foster industrial growth through business-friendly policies, lamenting the current trajectory as counterproductive. He urged for a maximum 20 percent increase in utility prices annually, warning that anything beyond this threshold would render the market untenable but increase in gas prices by over 222.77 percent during a year is not absorbable and manageable, and ultimately the remaining industries will close their operations.
Furthermore, Mr. Shah underscored the potential ramifications of the gas price surge, including the risk of industrialists resorting to importing yarn from abroad, exacerbating the strain on the country’s foreign exchange reserves and precipitating the depreciation of the Pakistani Rupee.
In light of these developments, the KPTMA strongly opposes the government’s gas price hike and urges a reconsideration of its stance. The association remains committed to advocating for the interests of its members and safeguarding the future of Pakistan’s textile industry.
Copyright Business Recorder, 2024
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