LAHORE: The value-added textile industry has rejected the frequent increase in prices of electricity and gas, saying the massive jump in electricity base rates up to Rs7.50 per unit for already under financial stress industry consumers would make Pakistani products uncompetitive in the international market.
Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Central Chairman Mubashar Naseer Butt and North Zone Chairman Waseem Akhtar Khan, in a joint statement, remarked that at a time of unsatisfactory export volumes and low industrial growth, the hike in electricity base tariffs for the export industry was surprising. If the decision is not withdrawn, it will prove dangerous for the country’s garment industry, they stressed.
Central Chairman Mubashar Naseer Butt said that another hike of Rs7.50 per unit for industry, commercial sector and other categories of consumers will be a cause of burden for them. He said that the increase in base rate of electricity is also part of pact signed between government and IMF, which says that the government has to notify NEPRA’s determinations without any delay and amendment.
Mubashar Butt stated that on July 14, 2023, the NEPRA had already approved average rebasing in tariff of Rs4.96 per unit across the board.
PRGMEA Central Chairman observed that the abrupt disruption of concessions committed under the Textile Policy 2020–2025 has resulted in decline in industry’s exports, which declined from $18.5 billion during FY2021-22 to around $16.6 billion during the outgoing FY2022-23.
He claimed that export performance was severely set back by the drastic turn in macroeconomic conditions during 2022-23, of which the historic rise in bank lending rates; raw material and, retraction of concessional gas and electricity tariffs during the second half of the last fiscal year damaged prospects of export growth irreparably.
It is to be noted that the industry’s export performance during FY23 proved beyond doubt that the export boom witnessed over the preceding fiscal two years of 2020 to 2022. The unexpected cotton crop performance during FY21 provided the industry access to cheap fibre, just as global commodity price spiral was going into full swing following reopening of major economies post-pandemic.
In fact, high value added segment readymade garments have truly come into their own over the last five years, proving resilience in export performance irrespective of suspension of concessional energy tariffs or concessional refinance loans. These segments also show very high and growing efficiency in utilization of working capital.
PRGMEA north zone chairman Waseem Akhtar Khan, while describing the government’s decision to increase electricity tariffs by Rs7.50 per unit as an incorrect decision, he urged the government to reverse the proposed increase.
The government’s decision to increase the electricity tariff is anti-industry, and the PRGMEA strongly condemns the government’s decision and calls on it to withdraw this move.
The PRGMEA regional chairman observed that the government’s ill planning and financial woes had multiplied the miseries of businesses which were facing unscheduled power outages across the country.
Copyright Business Recorder, 2023