Textile sector rejects increase in gas prices

OGRA has proposed price hike for SNGPL, SSGC consumers.

FAISALABAD: Textile exporters rejected the proposed raise in gas prices by the government and termed it an unwise move, as it will further increase the cost of business, hamper production and affect exports.

Earlier, the Oil and Gas Regulatory Authority (Ogra), in a summary to the petroleum ministry, recommended a hike in gas prices by 9.87% to Rs31.12 million British thermal units (mmbtu) for Sui Northern Gas Pipelines and 6.14% to Rs28.28 per mmbtu for Sui Southern Gas Company consumers. The notification, if approved by the government, will be implemented from January 1, 2013.

Pakistan Textile Exporters Association (PTEA) said the decision will paralyse the industry already facing the energy crisis and liquidity crunch, thus the government should cut taxes instead of putting additional burden on the sector.

To keep the economic cycle well on track, the government will have to shelve the decision to increase gas prices, it demanded. Many business units have moved out their operations to other countries and the decision will force more industrialists to do the same.

Gas prices for the industrial sector in Bangladesh and Sri Lanka were lower than Pakistan. In Pakistan, gas prices were Rs235 per unit higher than Bangladesh and Rs165 per unit higher than Sri Lanka.

PTEA Chairman Asghar Ali said gas supply to the industrial sector had been reduced by 329% in the last four years. Explaining, he said that gas supply remained suspended for 41 days in 2008-09, increasing to 175 days in 2011-12.

Quoting statistics, he said that product-wise details showed that knitwear exports went down 7.11% in quantity terms in the July-October period of the present fiscal year, bed sheet fabrics export decreased 13.4% and made-up articles were down 1.04% against the corresponding period of the previous fiscal year.

PTEA called for withdrawal of increase in gas prices to strengthen the industry and trade activities.

Published in The Express Tribune, December 6^th, 2012.