PTEA demands supply of system gas to textile industry
FAISALABAD – Pakistan Textile Exporters Association (PTEA) has expressed grave concern over suspension of system gas under 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.
In a statement here on Thursday, Chairman PTEA Shaiq Jawed expressed severe concern over switching of system gas to RLNG supply for textile industry in Punjab on a lame excuse of drop in mercury. 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 the gas tariffs within the region, he said, “Gas price in Bangladesh is USD 3/mmbtu, in Vietnam USD 4.2/mmbtu, in India USD 4.5/mmbtu; whereas in Pakistan system gas was available @ USD 7.6 and now RLNG would cost @ USD 11 per mmbtu. With such a huge difference in tariff, how our products would compete with rival countries.” Further, RLNG would cost almost 40% higher than other provinces, he lamented. Gas tariff is already burdened with various incidentals such as UFG @10%, GIDC @ Rs. 100/mmbtu and cost of supply etc; 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. Industry in Punjab is predominantly gas dependent for its captive and processing use and switching from system gas to RLNG will negatively impact its production cost amidst prevailing disparity in energy prices within the country as well as the region. Energy affordability is already a major concern but the SNGPL is meeting their financial ends at the cost of the industry, he added. In order to attain competitive edge in international market, system gas should be supplied to export oriented textile industry across the board on equal prices, he demanded.
Vice Chairman Ammar Saeed was of the view that rising cost of doing business over last several years has not only stalled fresh investment in textile industry but has also hampered the export growth and turn over. Punjab-based textile industry would be unable to compete even in domestic and international market in case the irritants are not removed. We have already lost the advantages of GSP Plus facility due to non-conducive situation, he added.
Government should devise a comprehensive strategy to counter the issue in order to accelerate the industrial pace and also to save livelihood of millions of workers. An enabling environment can attract prospective investors to undertake new investment initiatives by the textile industry, he asserted. Export sector being lifeline of national economy is a very sensitive sector and disruption in the tempo or bottleneck in export facilitation not only hurts the exports of the country but also have devastating impact on the industry causing productivity loss, job losses and industrial unrest. To keep the industrial wheel running and providing job employment to maximum working hands in the country, it is imperative to facilitate the optimum industrial activity, he asserted.
PTEA urged the economic managers of the country to come forward and support the industry in regaining the phase of bringing back viability in textile industry and economic prosperity of the country. PTEA stressed for supply of system gas to export oriented textile industry on regionally competitive prices to secure its competitive edge in international market and to attain sustainable growth.