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Textile exporters apprehensive on high energy costs

Textile exporters concerned in Pakistan
Textile exporters concerned in Pakistan

The Pakistan Textile Exporters Association (PTEA) has expressed concern over the suspension of system gas under the quota regime and supply of high-priced RLNG to export-oriented textile industries in Punjab. This would further add to the high cost of doing business and would hamper the export pace, PTEA Chairman Shaiq Jawed lamented.

He condemned the government’s indifferent attitude towards the Punjab-based textile industry as it is already facing a serious blow of non-viability due to high cost of doing business. Supply of high-priced RLNG would serve to cripple the industry, which is already at a comparative disadvantage in respect of production costs in the region, he said.

Quoting gas tariffs within the region, he said that gas price in Bangladesh is $3/mmbtu, $4.2/mmbtu in Vietnam, $4.5/mmbtu in India; whereas in Pakistan system gas is available at $7.6/mmbtu and now RLNG would cost $11/mmbtu. “With such a huge difference in tariff, how will our products compete with rival countries? Further, RLNG would cost almost 40% higher than other provinces,” Jawed remarked.

The gas tariff is already burdened with various incidentals such as UFG at 10%, GIDC at Rs100/mmbtu and cost of supply among others; whereas exporters cannot pass on these system inefficiencies to the international buyers. Export-oriented textile industry has an established right on the system gas, which the SNGPL is making expensive through unjustified steps, he said.

Energy affordability is already a major concern but the SNGPL is meeting its financial needs at the cost of the industry, he added. The PTEA chief demanded equal prices across the board to attain a competitive edge in the international market.

Also sharing his views, PTEA Vice Chairman Ammar Saeed said that the rising cost of doing business over the last several years has not only stalled fresh investment but also hampered export growth and turnover. “We have already lost the advantages of GSP Plus due to a non-conducive situation,” he added.

Saeed was of the view that the government needed to formulate a comprehensive strategy to counter the issue in order to accelerate industrial growth. PTEA urged economic managers of the country to support the industry and bring back viability of the textile sector. The association stressed for supply of system gas to the export-oriented textile industry on regionally competitive prices to secure its edge in the international market and to attain sustainable growth.



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