Punjab industry heading towards shutdown

Millers say they can’t operate with Rs70b energy price differential

Our Correspondent December 15, 2016

LAHORE: Businessmen of Punjab have warned that it has become difficult for industries of the province to run their operations and they are fast heading towards complete closure because of high cost of gas and electricity.

Speaking at a press conference, the All Pakistan Textile Mills Association (APTMA) leadership said Punjab-based mills could not operate with annual energy price differential of Rs70 billion.

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The mills were going out of business fast, particularly in Punjab, due to the energy price differential within the country and undue delay in announcement of the textile package, they said.

APTMA Punjab Chairman Syed Ali Ahsan decried that textile units in the province could not survive by paying Rs11 per unit for electricity consumption compared to Rs5 per unit for other provinces.

He said that total consumption of these textile mills was around 1,400 megawatts.

He suggested that electricity price for the textile industry should be restricted to Rs7 per unit across the country.

He also called for gas supply at Rs400 per million British thermal units to the textile mills of Punjab at a time when the government was shifting the entire industry to liquefied natural gas (LNG).

Separately in a meeting, the executive committee of the Lahore Chamber of Commerce and Industry pressed the government to implement the same electricity and gas tariffs across the country as discrimination in utility prices was hitting the Punjab industry hard.

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It said electricity and gas were basic raw material of the industry and difference in their prices between provinces was adding to the miseries of Punjab’s industrial sector as its products had almost become out of race in the global market.

The demand for lower energy prices came on a day when the Economic Coordination Committee (ECC) of the cabinet reversed its earlier decision on natural gas price reduction and restored the price at the previous level.

Published in The Express Tribune, December 16th, 2016.

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cueball | 4 years ago | Reply It's another reason the govt should stay out of "energy pricing". Why should taxpayers end up subsidizing rates for business owners? This also raises another question ... what happens when the expensive new Chinese Power Plants start to come on-line? Those power plants are likely going to be paid for with higher utility rates ... that going to shut down business across Pakistan?
Muzzammil | 4 years ago | Reply Industry's demand for cheaper gas (at Rs. 400 per mmbtu) in the pretext of LNG is not rational because, as per the LNG pricing formula, Pakistan is importing LNG at ~USD 7 mmbtu (0.137 of Brent, which is currently trading above USD 50 per barrel).
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