All Pakistan Textile Mills Association (APTMA) has requested a new tariff structure to support the struggling manufacturing industry and revive textile exports amid the removal of concessional tariffs for the industry to woo the International Monetary Fund (IMF).
APTMA stated that while it acknowledges the steps taken by the Government towards sustainability and energy conservation, these actions will have far-reaching consequences on the key export-led sectors. These businesses are already operating at low margins with increased competition from the regional countries but these steps with ultimately make it unviable to run economically.
“These users are critical to the supply chain of the textile sector. If these units shut down, even for two months, they may never be able to reopen, leading to a permanent shortage of domestically produced yarn and other intermediate products”, said Shahid Sattar, Executive Director APTMA in a letter to Power Division.
“All of this would have critical impact due to non-availability of intermediate products for exports to the entire industry, as well as, increasing the forex requirements for additional imports, he added.
Textile exports have already declined 14 percent in the first ten months for the FY 2023-23 and 22.6 percent on a monthly basis compared to last year. APTMA has named nearly three dozen prime users from the textile spinning and weaving sectors to consider new support tariffs for electricity and gas otherwise the exports are bound to decline further.
Pertinently, the government has discontinued the Regionally Competitive Energy Tariffs (RCET) on the gas of $6.5 per MMBtu and fixed electricity rate of Rs 19.99 kWh to five zero rate sectors i.e. textile, sports, surgical goods, leather, and carpets. The action was taken on IMF demand with bailout negotiations stalled since February.
Source: Pro Pakistani