Textile industry demands withdrawal of power surcharge

Published: February 18, 2018


LAHORE: All associations of the textile value chain in Punjab have appealed to the government to remove the surcharge of Rs3.42 per unit on power consumption, equalise gas tariff throughout the country like in the case of electricity and release all pending tax refund claims.

Presenting their demands at a press conference on Saturday, the industry stakeholders said the textile industry of Punjab had suffered a lot because of the high cost of doing business.

“We will take to the streets from next week if the government fails to address our concerns,” they announced.

According to a government source, the federal and Punjab governments are mulling over subsidising energy prices for textile manufacturers in an effort to provide a level playing field and make them competitive in global markets.

The subsidy is under consideration in the backdrop of a significant increase in international oil and gas prices that have pushed production cost significantly higher.

To build on the pressure, the textile bodies, including readymade garments and hosiery manufacturers, gathered in Lahore at the invitation of the All Pakistan Textile Mills Association (Aptma).

They pressed on with the demand that the government should slash the price of imported liquefied natural gas (LNG) for Punjab industries to the level at which domestically produced natural gas is provided to the remaining three provinces.

They also called for halting the collection of surcharge on electricity consumption.

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At present, Punjab yarn manufacturers, who are Aptma members, are paying Rs1,300 per million British thermal units (mmbtu) for the re-gasified LNG compared to around Rs900 per unit in early 2016.

The increase in LNG cost came following a 43% recovery in the Brent crude oil price to nearly a three-year high at $64.5 per barrel in the world market on Friday compared to the low of $45 in June 2017.

LNG price has been linked with Brent crude as Pakistan pays 13.37% of three-month Brent average for gas import.

Industries in Punjab heavily rely on imported gas to meet their energy needs. Other provinces, particularly Sindh and Balochistan, consume domestic natural gas at a relatively lower price of Rs600 per mmbtu (excluding the Gas Infrastructure Development Cess of Rs100-200 per unit).

Published in The Express Tribune, February 18th, 2018.

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