Millers to persuade govt on RCET

ISLAMABAD: The textile industry will sensitize the finance minister, Senator Ishaq Dar, and the state minister for petroleum, Musadik Malik, on Wednesday on how the withdrawal of Regionally Competitive Energy Tariff (RCET) is causing a rapid deindustrialisation in Punjab.

The industry will persuade the government to reinstate RCET for the export sector. In the letters to both ministers written on June 12, 2023, the All Pakistan Textile Mills Association (APTMA) also attached a PIDE study over the disastrous impact of the withdrawal of RCET on Punjab's export industry.

The study has mentioned that this year alone, Pakistan is experiencing a shortfall of more than $3 billion in textile exports as compared to last year. If urgent measures are not taken to reinstate RCET, this deficit is expected to increase by a further $4-5 billion in the coming fiscal year.

"The discontinuation of the regional competition of RCET has accentuated the adverse impact as industrial units across the country utilize gas in co-generation for power and steam. This compels the industry to rely on grid electricity, which is priced at levels that are not feasible," APTMA said in the letter.

As per the letters, this is further compounded by the differential in energy prices and supply shortfall, which hit Punjab-based industry most and is resulting in widespread closure. The price differential between elective electricity prices in Punjab and Sindh is staggering, with Sindh industry being charged 3 times lower rate for gas.