Hike in energy tariffs to deepen industrial crises: PTEA

FAISALABAD: Pakistan Textile Exporters Association (PTEA) Patron-in-Chief Khurram Mukhtar has voiced concerns over continuous increase in energy tariffs, warning of further crises in the already struggling industry.

In a press release issued here on Thursday, he demanded immediate reversal of the recent hike in energy tariffs for the export industry and suggested that the 18 per cent (PC) general sales tax (GST), imposed on electricity and gas bills for the export industry, should be turned into zero.

He said the GST levied on electricity and gas bills was refunded to the industry after a delay of four to six months, causing financial strain on the industrial sector.

Mukhtar emphasised that a significant portion, ranging from 30pc to 40pc, of production costs was attributed to energy expenses and any increase in the energy prices directly impacted the production costs.

The PTEA patron-in-chief called for discussions with the International Monetary Fund (IMF) to determine competitive energy prices and rationalise cross-subsidies. He said the recent hike in electricity and gas prices would result in severe losses for the industrial sector. Instead of increasing prices, Mukhtar urged the authorities to focus on controlling losses, incurred by transmission and distribution companies and ensuring complete recovery of dues. Regarding export refunds, Mukhtar highlighted the adverse effects of delays in their disbursement on industrial operations.

He underscored the urgent need for prompt repayment of exporters’ refunds and immediate implementation of zero-rated GST on energy bills. He warned that the manufacturing sector is already grappling with challenges such as rising external debts, a decrease in large-scale manufacturing, tax issues and escalating energy prices, necessitating an immediate rollback of the energy tariff increase for the industrial sector.