KARACHI: The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has been “shocked” over the cancellation of regionally competitive power tariff of 9 cents per KWH for the value-added textile export sector, and has expressed fears that discontinuation of the facility will hurt the economy.
In a letter to the prime minister, the PHMA said that the exporters are “shocked” over the Cabinet Division's corrigendum issued on Aug 19, 2022, stating that the federal government has withdrawn its decision of July 27, 2022 to provide the export-oriented industry with a tariff of 9 cents per KWH till end of 2022-23.
The cancellation of the approved regionally competitive power tariff will lead to further decline in textile and the total national exports, the letter said, a copy of which was also provided to Business Recorder on Tuesday.
The government's decision to facilitate exporters through the regionally competitive rates for RLNG tariff at $9 MMBTU and power at 9 cents per KWH to augment export was appreciated, it said.
Keeping in view the tariff approval, exporters of value-added textile sector negotiated their future deals, accordingly.
PHMA called the withdrawal decision a "very alarming" and "unfortunate" to have a "disastrous" impact on the cost of manufacturing of goods meant for exports.
The existing manufacturing cost is already higher in Pakistan as compared to the competing countries. Pakistani exporters’ deals fetch a very narrow margin of 2 to 3 percent, according to the letter.
The country's competing nations like Bangladesh, India, China and Vietnam strike contracts with the global buyers about 15 percent less rates comparing to Pakistan, it pointed out.
The cancellation of the approved power rates of 9 cents per KWH will be "highly unwise" and "disastrous" for the exports, it said and urged the government to continue the concessional tariff for the industries.
The PHMA called upon the premier to intervene in the matter and help continue the regionally competitive power tariff for export-oriented industries.
Copyright Business Recorder, 2022