Saturday, October 31st, 2020
Home »Fuel and Energy » Pakistan » Zahid Mazhar rejects proposed increase in gas prices
Zahid Mazhar, Chairman All Pakistan Textile Mills Association (APTMA) (Sindh-Balochistan Region) has said that the proposed increase in gas prices would be the last nail in the coffin of the textile and other industries.

While commenting on the news item published in the print media, that the federal government is going to increase price of gas by 31 percent for next financial year from July 01, 2019, he said that the industry is already facing unbearable costs of manufacturing which are very high as compared to the regional competitors. He said that the textile industry which is the largest export oriented sector of the country and contributing about sixty percent in foreign exchange earnings through exports which has not yet come out of the shock of the adverse decision of withdrawal of zero rating facility by the government in the Federal Budget 2019-20 and now the government is going to hit the industry with another blow in the shape of the harsh measure of increase in gas tariff. Such anti-industry and anti-export measures taken by the present government are like the continuity of policies leading to deindustrialization of the previous government, he added.

The Chairman APTMA Sindh-Balochistan Region while rejecting the increase in gas price for the industrial consumer in general and the export-oriented textile industry in particular said that it would lead to complete closure as the cost of doing business including energy cost in Pakistan is already very high as compared to the regional competitors. The gas tariff for industry in Bangladesh is US$ 3.0/MMBTU which is more than 50 percent cheaper than Pakistan, he added.

Zahid Mazhar said that the Ogra had fixed Unaccounted for Gas (UFG) @ 4.5 percent for the last few years but both gas companies continued on the opposite route reaching levels of around 14 percent - 15 percent, this meant huge direct loss to the nation in terms of substitution cost (in dollars) besides direct cost of significant environmental degradation. In an efficient gas system run by professional managements in other countries, UFG is less than 3 percent covering, essentially, uncontrollable gas loss arising from operational work on gas lines.

He said that earlier, due to high cost of doing business, inadequate supply of raw material, drastic increase in interest rate and liquidity constraints due to huge delay in refunds of sales tax, almost 140 textile mills have already closed their operation resulting in about one million workers have lost their jobs and around 75 to 80 mills are on the verge of closure which will add the unemployment figure by another 0.5 million labour force employed in the textile industry. He further said that due to the closure of about 140 mills and the mills operating under capacity Pakistan's textile exports is suffering an opportunity loss of more than 4 billion US$ per annum.

Zahid Mazhar demanded the government to save the export-oriented textile industry and Pakistan from complete disaster by not increasing the gas prices and instructing the gas utility companies to meet their revenue requirements by strictly following the UFG Benchmark in accordance with the international best practice and reducing other expenses with better management.-PR

Copyright Business Recorder, 2019


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