Lahore July 1 2022: Pakistan Textile industry fears to lost $ 1 billion in exports over suspension of gas and extended Eid holidays, announced by All Pakistan Textile Association on Friday.
The textile industry has achieved a new record in terms of exports reaching nearly $ 20 billion from $ 12.5 billion just two years ago. This fantastic growth was enabled by implementation of Regionally Competitive Energy Tariff (RCET), investment of over $ 5 billion in expansion and establishment of 100 new textile units resulting in enhanced export capacity of $ 500 million per month.
It is inexplicable that the exporting sector which has the capacity to deliver over $ 2.0 billion in exports per month in exports is being denied energy / gas and consequently exports will be significantly lower, much to the detriment of Pakistan's economy.
Gas/ RLNG to the industry has been suspended from July 1st to July 8th, following that, there would be Eid holidays from July 9th to 14th, shutdown of 15 days will translate to a loss of at least $ 1 billion. More than 50% of output will be lost in this month, with the very real risk of losing orders on a permanent basis as well as loss of repeat business due to delays in delivery of orders.
The decision has been made to divert more RLNG to the power sector for more electricity generation to mitigate the intensity of ongoing power outages of 6-14 hours across the country. In the month of July, the government will have only eight LNG cargoes against the demand of 12 cargoes, showing a deficit of 400mmcfd RLNG.
Pakistan LNG Limited (LNG) failed to obtain any LNG cargo from the international spot market in its three attempts. ENI has also defaulted on its LNG cargo, which was to be delivered on July 8.
Textile exports were expected to increase to $25 billion plus in the coming fiscal year. If this momentum is lost due to energy supply and cost constraints, Pakistan will be forced to seek additional $ 6 billion in loans from abroad which under the circumstances may not even be possible. Textiles have repeatedly delivered their commitments and proven that they are a viable and long-term solution towards economic stability.
Under these circumstances, we request that the gas/ RLNG supply of export-oriented industry may kindly be restored immediately.