Export industry; government urged to implement ECC's decision of reducing energy tariff

Pakistan Hosiery Manufacturers & Exporters Association (PHMA) Chairman Adil Butt said on Friday that delay in implementation of energy affordability initiative of the government has panicked the Punjab-based export industry.
He urged the government to implement the ECC decision of lowering energy tariff so that production could be maximized to enhance the exports of value-added knitwear industry.
He said the new government had announced to provide gas and electricity to the five zero-rated exporting sectors at regionally competitive rates, which was later endorsed by the Economic Coordination Committee (ECC) but not implemented so far.
He said the ECC had also decided that gas supply from SNGPL to the industrial sector in Punjab and Khyber Pakhtunkhwa will be provided at $6.5/MMBTU similar to the consumers of SSGC in Sindh.
Adil Butt said the role of value-added textile is vital in the national exports and the government should accord top priority to this sector taking necessary steps and measures to enhance its export efficiency. The export-oriented industry is already facing multiple challenges in the wake of high cost of manufacturing, exorbitant utility tariffs and high labour wages comparing to the competitors on the world markets.
He urged the government to notify the new gas tariff for the export industry at $6.5/MMBTU and electricity at 7.5 cents/kWh to enable the exporting industry to focus on increasing exports. He said the industry was not in a position to pay the new bills of gas at the price of $12.54/mmbtu.
"We appreciate the govt efforts to reduce the cost of manufacturing and make the value-added textile export industry more viable," the chairman added.
He has also urged the Commerce Ministry to work on rationalizing duties structures and minimize taxes and duties on import of raw materials and instead apply duties on import of finished/luxury goods in order to facilitate the domestic industry. The Ministry should also hold a meeting to simplify DTRE Scheme.
He said the ministry should also discourage export of raw material and encourage export of value-added items. He reiterated the request of value-added textile exporters to the State Bank of Pakistan to facilitate exporters' authorized dealer to make import advance payments against irrevocable Letters of Credit (L/C) upto 100 percent of the value of the goods and upto $10,000 per invoice for the import of all eligible items without the requirement of L/C or Bank Guarantee from the supplier abroad.