The gas shortage is hitting Pakistan at a critical economic and political juncture. The country exported $11.4 billion of textiles during the first nine months through March 2021. However, with a shortage of gas supplies during winter, Pakistan lost about $250 million in December probably amounted to around 20% of Pakistan’s textiles exports last month.
Pakistan, heading into the coldest months of the year, issued an emergency tender to import more LNG in November after suppliers backed out from deliveries amid skyrocketing prices and surging global demand. More recently, gas trader Gunvor told Pakistan it would be unable to make a delivery scheduled for Jan 10, 2022. Every winter, the country faces gas shortages because Pakistan’s natural gas fields are seeing a depletion of about 9% each year, and imported LNG is costly.
Shahid Sattar, executive director of All Pakistan Textile Mills Association (APTMA), said that about $250 million of textiles exports were lost last month after mills in Punjab were forced to shut for 15 days. Factories in the province are dependent on regasified imports of liquefied natural gas, while domestic supply is being diverted to other regions.
He further claims the prohibitive high gas prices are due to the energy ministry’s inability to arrange supply and is hurting the very future of Pakistan’s exports and economy. Last Wednesday, the government restored gas supplies to the textiles sector, but frequent power blackouts are still curbing operations. Mills can only run at about 80% of capacity if the situation persists.
Pakistan’s textile sector is flourishing and grabbing millions of dollars through its exports. However, mismanagement of resources and lack of interest is hurting the progress of the textile sector. Therefore, the situation should be dealt with with a prompt response. In the future, governments should make a proper mechanism to avoid such shortages with pre-calculations to fulfill the textile sector’s demands as winters only last for 2-3 months in Pakistan. This will boost the textile industry, and the country can increase its exports target and GDP.
