ISLAMABAD: Textile sector fears $5 billion lower exports consequent to the government decision to discontinue gas supply to the textile industry in Punjab, claims All Pakistan Textile Association Executive Director and Secretary-General Shahid Sattar.
Shahid Sattar told Business Recorder by telephone that the government decision would result not only in loss of exports but would also render a considerable number of workers in the sector jobless. He said that textile sector was confident of achieving over $21 billion textile exports this fiscal year but subsequent to gas supply issue, exports would not be more than $16 billion. Discontinuation of gas supply would negatively impact on GDP growth and render the workers jobless, he added.
He emphasized that the government’s target to increase exports to $30 billion would not be possible in the wake of discontinuation of gas supply to the major contributor, textile sector, to exports.
To a question about negotiation with the government, Sattar said talks were being held with the government. It was high time the government reviewed priorities in order to remain on track or else all gains made would be lost and additional forex loans would be required to bridge the gap created by lower exports, he stated.
He said the industry was assured by Minister for Energy that gas supply to the textile sector would be made available at $9/MMBTU from $6.5/MMBTU. However, as per Ministry’s Gas Load Management Plan presented to the Cabinet Committee on Energy presided over by Minister for Planning Asad Umar on December 2, 2021 gas to Captive Power Plants, whether co-generation or not, was to be subjected to load-shedding starting from December 15, 2021.
He claimed that textile units located in Punjab were affected as on the one hand their gas tariff was increased to $9/MMBTU while on the other hand they were facing load-shedding.
Pakistan’s 70 percent textile industry is based in Punjab and the disconnection of gas will bring 80 percent of the industry almost to a standstill. The bulk of textile mills are co-generation and use gas to produce electricity and even if the additional electricity load could be accommodated, the mills cannot generate steam and hot water from electricity. The Power Distribution Companies are not in a position to supply additional power to the mills. The textile mills in Punjab were unable to operate at the moment, he said.
In a statement, the textile body asked the Prime Minister to restore power and gas supply to the textile industry. Chairman APTMA urged Prime Minister Imran Khan to intervene immediately to ensure supply of electricity and gas to textile units and warned that if the sector was pushed against the wall and their genuine concerns were not addressed, workers and their families would take to the roads.
“And if we are unable to deliver orders on time, orders once lost will be a permanent loss to Pakistan, and such a decision taken by foreign buyers is extremely difficult if not impossible to reverse,” the letter argued.
In response to APTMA statement, Hammad Azhar took to twitter and stated that “process gas is being supplied uninterrupted to textile sector. Only gas that they were using for captive power plants has been curtailed. APTMA has taken a stay order on the tariff increase (due to rise in LNG prices) to USD $9/MMBtu from $6.5 MMBTU,” he added.
