On Monday, the textile industry urged the government to quickly implement a plan to lower power tariffs for industrial consumers to 9 cents per kilowatt-hour to help the country boost its exports and economic growth.
The All Pakistan Textile Mills Association (APTMA) stated the tariff reduction, decided last week by the government and the Special Investment Facilitation Council (SIFC), was a vital structural reform that would help Pakistan regain its competitiveness in the global market by correcting the cost structures of energy-intensive sectors.
“Power tariffs of 9 cents/kWh will not only reverse the declining power consumption of industrial consumers but also increase power consumption such that any power sector revenue losses from a price reduction will be more than offset by a positive volumetric effect,” the APTMA said in a statement.
APTMA said the implications of the current tariff regime extend beyond any specific industry or sector, affecting employment, industrial growth, and the country’s overall economic stability. “Inflated energy costs have forced thousands of firms to scale back production, leading to job losses and reduced economic activity.”
“Pakistan is rapidly deindustrializing, as evidenced by the decline in power generation and consumption over the last few months, especially that of large industrial consumers,” the statement said. The group said that Pakistan’s gross external financing requirements will be over $25 billion annually over the next five years. “In simple terms, this is a foreign exchange that we need to pay for our imports and to service our debt, but the money that we—as a country — do not have.”
APTMA said the global economy is fiercely competitive, and to thrive, Pakistan must offer an environment conducive to business growth. “Rationalized energy costs are a critical component of this environment. APTMA stands ready to work with the government and other stakeholders to ensure the long-term success of the Pakistani economy. We therefore call upon the government to implement their plan of rectifying power tariffs for industrial consumers with utmost urgency.”