The textile industry in Pakistan’s Punjab would likely close down operations once the Government withdraws the regionally competitive energy tariff (RCET) of PK Rs. 19.90/unit and gas tariff of US $ 9/MMbtu.
The country would also face further deterioration of the balance of payment crisis as pulling out of the RCET would result in a loss of US $ 10 billion per annum. This was according to the All Pakistan Textile Mills Association (APTMA).
APTMA, in a communication sent to the financial managers of the new regime, said ‘Punjab’s textile industry was being thrown under the bus’ and argued the closure of the industry would lead to a massive spate of unemployment throughout the country.
The textile industry has been asking for an electricity tariff of 9 cents despite the fact that total electricity cost stood at 8.1 cents/unit if cross-subsidies were excluded as per CPPA and NEPRA calculations, said APTMA Secretary General Shahid Sattar.
The association wants the Government to persuade the IMF to continue RCET for the exporters and especially for the textile sector, which is vital to make internationally competitive products.
“We have invested US $ 5 billion in the textile sector over the last three years and the textile sector surged to US $ 19.5 billion in the financial year 2022 from US $ 12.5 billion in FY 2020,” said Sattar.
He further added if the Government were to succumb to the pressure of the IMF, the 55 per cent growth in exports for FY ’22 and investment of US $ 5 billion would be a waste.
APTMA asked the Prime Minister to immediately intervene and urged the finance minister to stop the withdrawal of the RCET. He also said “And more importantly, 60 percent of textile units have already been closed and the RCET tariff withdrawal will lead to total closure of the textile industry in Punjab.”