KARACHI: All Pakistan Textile Mills Association (APTMA), Southern Zone, has strongly rejected increase of 223 percent in gas tariff in last one year and termed it as detrimental for the export-oriented textile industry of Pakistan.
APTMA said that export-oriented textile industry of Pakistan is losing market share in the global marketplace due to the alarming rise in Energy Tariff. They have demanded the federal government to reverse its decision of astronomical increase in gas tariff to make textile exports competitive in the international market which is being continuously eroded by surge in energy prices during last one year.
The observation was made in the Extra Ordinary General Body Meeting of All Pakistan Textile Mills Association of Southern Zone, held on Thursday, attended by a large number of members of the zone including Central Chairman APTMA.
The meeting observed that the recent increase in gas tariff has proven to be disastrous for the export-oriented textile industry which has the largest share of 60 percent in total exports of the country.
It was also observed by the meeting that due to increase of 223 percent in gas tariff, the export-oriented textile industry is becoming uncompetitive in the international market and is compelled to shut down due to the unbearable and unsustainable financial losses emanating from unprecedented cost of doing business; primarily due to highest ever interest rate of 22 percent and an astronomical increase in energy price, which has made Pakistani exporters uncompetitive in the export markets by a large margin.
Gas tariff was Rs 852/MMBTU till 31st December 2022 and was raised to Rs 1100/MMBTU from 1st January 2023 then to Rs 2400/MMBTU in November 2023 and now raised to Rs 2750/- MMBTU from 1st February 2024, thus overall increase of Rs 1892/MMBTU or 223 percent during a year.
The meeting also observed that as the electricity supplying companies in Sindh and Balochistan don’t have the capacity and capability to provide required load, therefore industries are compelled to use their gas-based power plants to operate their mills without any interruption.
Presently, the government is trying to encourage the use of grid electricity instead of electricity produced by gas-based power generation, without realizing that this policy is not implementable in Sindh and Balochistan. This policy instead of resulting in increase of grid electricity consumption is going to result only in closure of textile mills.
Zahid Mazhar Chairman APTMA Southern Zone said that due to massive surge in gas tariff, there is a capacity closure of 30 percent firms in the textiles and apparel sector and rest are at high risk of total closure over the coming weeks due to stiff competitive in the international market as compared to the regional competitors like India, Bangladesh and Vietnam.
Copyright Business Recorder, 2024
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