It appears that All Pakistan Textile Mills Association and Pakistan Textile Exporters' Association have shocked the Finance Minister Muhammad Ishaq Dar asserting that country's textile exports would drop by 2.5 billion dollars in case the textile industry in Punjab is denied natural gas during the winter months. As it is, the drop in exports during the month of September is by a billion dollars and that Pakistan would not be able to take advantage of GSP Plus opportunity, a favour offered by the European Union for boosting the country's exports. Minister of Petroleum and Natural Resources, Shahid Khaqan Abbasi has very clearly said that there is not enough domestically-produced natural gas for all sectors of the economy. And, the earliest import of Liquified Natural Gas will not be before March/April next year.
The Punjab-based industrialists have clearly stated that they will not be able to use imported LNG since the price differential between imported LNG and domestic natural gas would cost the exporters between Rs 82-114 billion a year, which would make the Pakistani cotton-based textiles globally incompetitive. Industrialists have further argued that transfer of their share of natural gas to domestic consumers would not be enough and there shall be loadshedding of gas or drop in pressure which would result in a hue and cry from domestic users.
We understand the sensitivity of the government towards domestic consumers, but would once again urge the federal government to offer tax credit to households who convert their natural gas-based water heaters to solar heaters. The drop in domestic usage plus a total shutdown of Compressed Natural Gas (CNG) for transportation would leave enough gas for productive sectors of the economy. Exporters, power sector and fertilizer should have a clear precedence over any other sector of the economy. Domestic consumers and CNG pumps need to be given lower priority than the industry followed by commercial users of natural gas. We also do understand that the power sector has much higher level of efficiency than captive power plants of the textile sector. But the exporters earn dollars for the country and under no circumstance should the government allow any slide in exports. A market share once lost would not be easy to recoup. Further, if we allow the cotton-based textiles to operate at full throttle the government would not need to force the Trading Corporation of Pakistan (TCP) to buy local cotton to help farmers. It is in the interest of cotton textile units to ensure higher raw cotton output in the country. How can the Finance Ministry take decisions in isolation regarding prioritisation of domestic natural gas. All issues need to be considered. And, the government needs to ensure better exports as well as higher job opportunities. Employed persons can buy goods and services at a higher price than those who have no job. So we can hope better sense would prevail and instead of taking populist decisions government would exhibit boldness in the larger national interest.
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