FAISALABAD: Abrupt policy reversals are wreaking havoc to the economy. Withdrawal of Regionally Competitive Energy Tariff on Gas/RLNG supply shall turn out to be hugely disastrous for textile export industry which is already facing serious blow of non-viability within region.
Expressing grave concern over the recent move of withdrawal of concessionary tariff on gas/RLNG supply to five export-oriented sectors, the senior leadership of Pakistan Textile Exporters Association (PTEA) termed it an imprudent and anti-export decision as high production cost has already damaged export growth and adversely impacted the textile industry.
In a statement here on Monday, Sohail Pasha said that the withdrawal of Regionally Competitive Energy Tariff on Gas/RLNG supply shall put the textile export industry at a halt resulting in massive de-industrialization & unmanageable unemployment.
Country’s exports are already falling consistently both in value and quantities; the Government’s immediate intervention is solicited to check the drastic downfall in exports.
He said that textile export industry was getting gas/RLNG @$9 per mmbtu and now, export sectors will have to pay an additional $4 per mmbtu which will lead the production cost to new heights.
He cautioned that unwise move of increasing Gas/RLNG tariffs for export sectors may sabotage the efforts of exporters to up exports.
Textile exports have witnessed a massive increase of over 55 percent from $ 12.5 billion in FY 2020 to $19.5 billion in FY 2022 as a direct consequence of the competitive energy tariff. Pakistan’s textile industry, however, is facing a major crisis as it is rapidly losing credibility and competitiveness in the global market.
He said Government should encourage exports and export-oriented sectors to have long-term sustainability in the balance of payments as it is an important source of foreign exchange.
Exports contribute directly to GDP growth, employment generation and provide the only sustainable long-term solution. Government should set its priorities right and accord preferential treatment to boost exports and generate industrial activities.
Arif Mahmood Qureshi was of the view that abrupt policy reversals are immensely damaging the export pace. Withdrawal of RCET of Gas/RLNG @$9 per mmbtu will render the textile industry, especially in Punjab, uncompetitive within the country and the region.
Resenting upon the Government’s discriminatory policies, he said that industries in other provinces are using low-priced gas/RLNG for their industrial needs; whereas the highest revenue-generating Punjab-based industries are compelled to use high-cost RLNG for their production process which is quite injustice.
Government must take cognizance of serious matter and step up to save Punjab-based industry from disaster as high energy cost is holding it back from growing up to full potential, he added.
This is all the more required given the uncertain economic conditions prevailing in the country. He urged the Government to implement Weighted Average Cost of Gas (WACOG), the only workable solution which allows the creation of a combined and logical gas market.
Government must take cognizance of serious matter to safeguard country’s exports and employment. Textile industry is the only hope for a revival of country’s economy which is currently jolted by the high cost of doing business.
PTEA leadership urged the Government for continuity of Regionally Competitive Energy tariffs for the export industries for sustainable growth as an increase in export proceeds can lift the economy.
Copyright Business Recorder, 2023